[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


               LEGISLATIVE PROPOSALS AND TAX LAW RELATED
                 TO PRESIDENTIAL AND VICE-PRESIDENTIAL
                              TAX RETURNS

=======================================================================

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON OVERSIGHT

                                 OF THE

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            FEBRUARY 7, 2019

                               __________

                            Serial No. 116-3

                               __________

         Printed for the use of the Committee on Ways and Means

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


                              __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
35-635                      WASHINGTON : 2020                     
          
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                      COMMITTEE ON WAYS AND MEANS

                RICHARD E. NEAL, Massachusetts, Chairman

JOHN LEWIS, Georgia                  KEVIN BRADY, Texas, Ranking Member
LLOYD DOGGETT, Texas                 DEVIN NUNES, California
MIKE THOMPSON, California            VERN BUCHANAN, Florida
JOHN B. LARSON, Connecticut          ADRIAN SMITH, Nebraska
EARL BLUMENAUER, Oregon              KENNY MARCHANT, Texas
RON KIND, Wisconsin                  TOM REED, New York
BILL PASCRELL, JR., New Jersey       MIKE KELLY, Pennsylvania
JOSEPH CROWLEY, New York             GEORGE HOLDING, North Carolina
DANNY K. DAVIS, Illinois             JASON SMITH, Missouri
LINDA SANCHEZ, California            TOM RICE, South Carolina
BRIAN HIGGINS, New York              DAVID SCHWEIKERT, Arizona
TERRI A. SEWELL, Alabama             JACKIE WALORSKI, Indiana
SUZAN DELBENE, Washington            DARIN LAHOOD, Illinois
JUDY CHU, California                 BRAD R. WENSTRUP, Ohio
GWEN MOORE, Wisconsin                JODEY ARRINGTON, Texas
DAN KILDEE, Michigan                 DREW FERGUSON, Georgia
BRENDAN BOYLE, Pennsylvania          RON ESTES, Kansas
DON BEYER, Virginia
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
TOM SUOZZI, New York
JIMMY PANETTA, California
STEPHANIE MURPHY, Florida
JIMMY GOMEZ, California
STEVEN HORSFORD, Nevada

                     Brandon Casey, Staff Director

                 Gary J. Andres, Minority Chief Counsel

                                 ______

                       SUBCOMMITTEE ON OVERSIGHT

                     JOHN LEWIS, Georgia, Chairman

SUZAN DELBENE, Washington            MIKE KELLY, Pennsylvania
LINDA SANCHEZ, California            JACKIE WALORSKI, Indiana
TOM SUOZZI, New York                 DARIN LAHOOD, Illinois
JUDY CHU, California                 BRAD R. WENSTRUP, Ohio
GWEN MOORE, Wisconsin
BRENDAN BOYLE, Pennsylvania


                            C O N T E N T S

                               __________

                                                                   Page

Advisory of February 7, 2019 announcing the hearing..............     2

                               WITNESSES

Joseph J. Thorndike, Director of the Tax History Project, Tax 
  Analysts.......................................................    13
George K. Yin, Edwin S. Cohen Distinguished Professor of Law and 
  Taxation, University of Virginia School of Law.................    25
Steve Rosenthal, Senior Fellow, Urban-Brookings Tax Policy Center    32
Noah Bookbinder, Executive Director, Citizens for Responsibility 
  and Ethics in Washington.......................................    42
Kenneth J. Kies, Managing Director, Federal Policy Group.........    49

                       SUBMISSIONS FOR THE RECORD

The Honorable Anna G. Eschoo, statement..........................   171
The Center for Fiscal Equity, statement..........................   173
Public Citizen, statement........................................   175
Americans for Tax Fairness, statement............................   177

 
                   LEGISLATIVE PROPOSALS AND TAX LAW
                      RELATED TO PRESIDENTIAL AND
                     VICE-PRESIDENTIAL TAX RETURNS

                              ----------                              


                       THURSDAY, FEBRUARY 7, 2019

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                 Subcommittee on Oversight,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 3:16 p.m., in 
Room 1100, Longworth House Office Building, the Honorable John 
Lewis [Chairman of the Subcommittee] presiding.
    [The advisory announcing the hearing follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman LEWIS. The Subcommittee will come to order. I 
regret in the delay. We had some votes on the floor.
    Good afternoon to everybody. Let me begin by congratulating 
the Ranking Member, Mr. Kelly, on his appointment to this 
Subcommittee. I hope that we will continue the good and 
thoughtful work on behalf of the American taxpayers. We have 
been called. We have been chosen to lead at this time in our 
history.
    I would also like to welcome the new and returning Members 
of the Oversight Subcommittee. I look forward to working with 
each and every one of you in the 116th Congress.
    During today's hearing, we will examine a topic of great 
interest to the American people. We will review whether a 
President, vice president, or any candidate for these office 
should be required by law to make their tax return available to 
the public. In other words, we will ask the question: Does the 
public have a need to know that a person seeking or holding the 
highest office in our country obeys the tax laws?
    To help inform our thinking, we will review the voluntary 
release of tax return by Presidents and others. The Federal tax 
laws that protect taxpayer's information recent bill, including 
H.R. 1, that would require Presidents and vice presidents to 
disclose their tax return, an Internal Revenue Service tax 
return filed by President and vice president.
    This afternoon, I am reminded that over 45 years ago, we 
were in a situation that is not much different than today. Many 
of you are old enough to remember when President Nixon faced 
questions about his Federal income taxes. During a press 
conference call for review by Congress of his return, he said, 
In all of my years of public life, I have never profited, never 
profited from public service. And in my many years of public 
life, I welcome this kind of examination, because people have 
got to know whether or not their President is a crook.
    He concluded by saying, Well, I am not a crook, even though 
the IRS wrote him a letter stating his return wasn't correct. 
The investigation by Congress found that he owed almost 
$480,000 in tax and interest.
    The question that arose then and remain today are, first, 
should the public know whether a person who is running for the 
office or who is currently leading our Nation paid the correct 
amount of tax? In the case of Nixon, the answer was yes.
    Secondly, is it fair to expect the IRS to enforce Federal 
tax law against the President who is the head of the executive 
branch and has final control of the agency? In the case of 
Nixon, the answer was no.
    These and other grave questions require thoughtful and 
serious consideration. We have to do the right thing. We are 
called to do the right thing. We have been selected. We have 
been chosen.
    I thank our experts for joining us today, and I look 
forward to their testimony.
    [The prepared statement of Chairman Lewis follows:]
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    Chairman LEWIS. Now I am pleased to recognize the Ranking 
Member for his opening statement, Mr. Kelly.
    Mr. KELLY. Thank you, Mr. Chairman, and thanks for holding 
this hearing today.
    As this is my first hearing as Republican leader on the 
Oversight Committee, I want to start by saying that I very much 
look forward to working together with you, as well as other 
Members of the Subcommittee, specifically on issues of 
bipartisan concern.
    Personally, I must say that when I found out we would be 
serving together on this Committee, I was particularly 
delighted. I so fondly remember our time in Alabama as we 
walked across the Edmund Pettus Bridge with my grandson back in 
March of 2015 to mark the 50th anniversary of the Selma to 
Montgomery march. At that time, George was 8 years old, and you 
were so gracious with him. We have many pictures of the two of 
us talking with George.
    And one of the things that George and I talked about, I 
said, Georgy, you and I are going to come back for the 100th 
anniversary of the bridge and we are going to walk across 
together. He said, well, Grandpa, how old are you now? I said, 
I am 65. He said, Grandpa, you are going to really be old. And 
I said, well, maybe you can push me across the bridge.
    But you took time to spend with that little 8-year-old, and 
he still has those pictures and those memories to go with it. 
So serving with you on this Committee is phenomenal.
    And I know that you and Chairman Jenkins had a good working 
relationship, particularly with things like the bill to 
redesign the IRS. And I would like to continue to build upon 
that foundation in this Congress also.
    The primary role of this Subcommittee, I believe, 
Government Oversight, is an important role for every Member of 
Congress, because we are the taxpayers' watchdogs here in 
Washington as well as being legislators. Government oversight 
is critical to the protection of taxpayers and the safety of 
all Americans.
    As Senator Grassley once said, oversight is about keeping 
faith with the taxpayers and giving people confidence that the 
government plays by the rules or is held accountable. That is a 
role I hope to play on this Committee, and I look forward to 
serving with you in this capacity, Mr. Chairman.
    Now, for today's hearing, I want to start by stating the 
obvious. All Americans, every single American has a right to 
the privacy and of the personal information contained in their 
tax return. That is why we have a statute in law, 6103, that 
covers every American from the President to your next-door 
neighbor and your family. It mandates that the Federal 
Government must keep tax returns and tax return information 
private.
    Congress enacted taxpayer protections that are embedded in 
Section 6103 of the Tax Code to ensure every American's privacy 
and to prevent the use of taxpayer information from being made 
public. Americans should be able to trust that the Federal 
Government or some unelected bureaucratic in Washington is not 
going to publicly release their tax returns without the 
taxpayer's consent.
    Tax returns can have a lot of sensitive information in 
them. It is not just all income, expenses, and deductions. 
There is information on where you live, what you do for a 
living, what kind of car you drive, information on your bank 
account, which cell phone is yours, whether you have health 
insurance, and the names and Social Security numbers of your 
spouse and all of your children.
    Keeping this information confidential is critical to the 
integrity of the U.S. tax system, which is only functional 
because taxpayers voluntarily pay their taxes. According to the 
National Taxpayer Advocate, 98 percent of all tax revenue paid 
by American taxpayers is paid voluntarily. That means that only 
a small, percentage, 2 percent of taxes are collected through 
audits and enforcement. Ninety-eight percent is voluntarily 
paid. Ninety-eight percent of anything is a lot.
    So I have to take a closer look and ask why. I believe this 
is because of the trust the American taxpayers have in our 
system and that privacy is at the foundation of that trust.
    Now, some of my colleagues on the other side of the aisle 
have suggested using this Committee as an avenue to obtain and 
release the President's tax returns in the name of 
transparency. As leaders of the Ways and Means Committee, I 
don't believe we have to choose between protecting privacy and 
promoting transparency among public officials. To begin with, 
Congress is prohibited by law from examining and making public 
the private tax returns of Americans for political purposes. 
Such an abuse of power would open a Pandora's box, and it would 
be tough to get a lid back on. It would set a very dangerous 
precedent.
    And the question is where does it end? What about the tax 
returns of the Speaker, the Members of Congress, or Federal 
employees or, for that matter, any political donors? There is 
no end in sight for those whose tax information may be in 
jeopardy.
    Thankfully, violating taxpayer privacy is not the only 
option for increasing transparency. I support the current 
ethics review in place which ensure that Presidents and vice 
presidents are held accountable to taxpayers. My colleagues on 
the other side of the aisle have voiced the need to have 
experts review the President's tax return with a fine-tooth 
comb. But isn't that the exact reason why the IRS, the agency 
with just that level of expertise, conducts mandatory audits of 
the President and vice president every year? Yes, that's right, 
the IRS audits the President and the vice president every 
single year, whether he or she is a Republican or a Democratic. 
I don't think most Americans know that is the case. I certainly 
didn't know it until I started doing some research myself and 
inquiring.
    In addition to IRS audits, there are also financial 
disclosures required. If my colleagues have a valid concern 
with the financial disclosure requirements, then let's come 
together to legislate a thoughtful solution to require 
additional disclosures. If there are challenges in obtaining 
required documents for disclosure, then let's look at how we 
can make that process better and more transparent. But the 
reckless sharing of a taxpayer's private information for 
political purposes would be unprecedented and completely 
outside the bounds of Congress' role as a legislative body.
    Our role is oversight and certainly not overreach. And we 
can and must do better. Therefore, I look forward to hearing 
from our witnesses on how to do that better, that is, how to 
best protect our American taxpayers.
    Thank you, Mr. Chairman. It is great to be with you.
    [The prepared statement of Mr. Kelly follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman LEWIS. Well, thank you, Mr. Kelly. And thank you 
for your wonderful comments about our trip to Alabama with your 
grandson George.
    Mr. KELLY. Yes, with George.
    Chairman LEWIS. Without objection, all Members' opening 
statements will be made part of the record.
    Now we will hear from our panel. I ask that each of you 
limit your testimony to 5 minutes. I know you have been so 
patient. You have been waiting for a long time. So you can, you 
know, cut it as short as possible. We will not object. Without 
objection, your entire statement will be included in the 
record.
    It is now my pleasure to introduce the director of the Tax 
History Project, Mr. Joseph Thorndike.
    You may begin, sir.

 STATEMENT OF JOSEPH J. THORNDIKE, DIRECTOR OF THE TAX HISTORY 
                     PROJECT, TAX ANALYSTS

    Mr. THORNDIKE. Good afternoon, Chairman Lewis, Ranking 
Member Kelly.
    Chairman LEWIS. I should have said Dr. Thorndike.
    Thank you, Doctor.
    Mr. THORNDIKE. Thank you.
    It is an honor and privilege to be here today to talk about 
the long voluntary tradition of tax return disclosure by 
American Presidents, vice presidents, and major party nominees.
    As has been said, I am Joseph Thorndike, director of the 
Tax History Project at Tax Analysts, a nonprofit, nonpartisan 
provider of tax information. As part of my job, I am the 
curator of a collection--an electronic collection of 
Presidential tax returns. I speak today on my own behalf, not 
for any organization.
    I will be making two main points. First, for more than 40 
years, American Presidents have been making substantial 
voluntary disclosures of personal tax information. Since 1977, 
those disclosures have been annual, with each sitting President 
releasing a complete tax return. Disclosures by vice presidents 
have been nearly as consistent. And major party nominees, while 
generally restricting their disclosures to campaign years, have 
also released at least one complete tax return and sometimes 
many more.
    This unbroken string of disclosures ended in 2016 when 
first candidate and then President Donald Trump declined to 
release any personal tax information.
    Secondly, this tradition of voluntary tax disclosure is 
fragile. By its nature, a tradition can lack clear standards 
and procedures. It tends to vary and change and perhaps to even 
weaken over time. Some political leaders have resisted or 
dragged their feet about disclosure. Until 2016, all ultimately 
chose to comply. But absent clear, binding, bright-line 
requirements, the nature of that compliance has varied 
considerably. That variability has underscored the 
vulnerability of the tradition itself.
    Let me talk just briefly about origins, which the chairman 
has already mentioned. Rarely does the hand of history weigh 
quite so heavily on current policy as it does around this 
topic. Over the past four decades, American politicians have 
been releasing their personal tax returns because President 
Nixon chose to release his personal tax returns, albeit under 
some duress.
    Nixon's tax troubles came to light in a lawsuit that 
happened to mention a large deduction he had taken for the 
donation of his vice presidential papers to the National 
Archives. That revelation gave rise to months of speculation 
and ultimately a leak from within the IRS. To help quell the 
scandal, Nixon released 4 years of personal returns and invited 
the Joint Committee on Internal Revenue Taxation, as it was 
then called, to examine those returns. It is worth noting that 
Nixon made this release while already under audit by the 
Internal Revenue Service.
    Beginning with Jimmy Carter, every President through Barack 
Obama has opted to release a complete tax return during each 
year in which he has held office. The same is true for vice 
presidents since Walter Mondale, including Vice President 
Pence.
    Similarly, beginning in 1976 and continuing through 2012, 
every major party nominee and his or her running mate has made 
at least one significant disclosure. From 1980 to 2012, these 
have included at least one complete tax return and sometimes as 
many as 30.
    While Presidents, vice presidents, and major party nominees 
have generally observed the tradition of disclosure, there have 
been occasional issues, especially around the disclosure of tax 
returns filed by candidate spouses, some of which have included 
partnership and business returns that those spouses were 
disinclined to release.
    In addition, the 2016 election featured numerous incomplete 
tax disclosures with candidates from both parties opting to 
release just the Form 1040 rather than a complete return. It 
bears notice that if Nixon had released only his Form 1040 in 
1973, investigators would have been unable to discover the most 
serious problems with his returns.
    I would like to turn briefly to the subject of these 
Presidential audits that have already been mentioned. In 1977, 
the IRS established new procedures, still in force, requiring 
an annual audit for every President and vice president while in 
office. According to IRS officials at the time, the policy was 
established in light of, quote, everything that has happened.
    The past in question was Nixon's, and the Nixon returns had 
actually been audited twice, the second audit finding numerous 
serious problems. The first had found none and it instead 
concluded with a commendation for the President from the IRS 
for the care shown in the preparation of his returns. A routine 
politeness maybe, but one that was disconcerting in retrospect.
    And indeed, that episode underscored a key question both at 
the time and now: Can we rely on the IRS to fairly and 
vigorously enforce the tax laws when applied to a President? 
Doubts about the answer to that question are what prompted 
Nixon to make his release essentially allowing for what we 
would today call a crowdsourced backstop to the IRS audit. And 
until recently, that backstop remained in place.
    In conclusion, I believe that the four-decade tradition of 
return disclosure is clearly imperiled most seriously by 
President Trump's refusal to release his returns, but also by 
the growing popularity of these partial disclosures. I believe 
we would all be better off, candidates, the news media, 
historians, and public, if this informal tradition were 
transformed into something more substantial, well-defined, and 
legally binding.
    Absent clear standards and procedures, a tradition can be 
interpreted, manipulated, and ultimately diminished by anyone 
reluctant to observe it. And the indeterminacy of a tradition 
is also an invitation to endless begging, pleading, and 
shaming, none of which is good for the body public.
    I am happy to answer anybody's questions.
    Chairman LEWIS. Thank you very much.
    [The prepared statement of Mr. Thorndike follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman LEWIS. And now we will hear from a distinguished 
professor of law, Professor Yin, from the University of 
Virginia.

   STATEMENT OF GEORGE K. YIN, EDWIN S. COHEN DISTINGUISHED 
PROFESSOR OF LAW AND TAXATION, UNIVERSITY OF VIRGINIA SCHOOL OF 
                              LAW

    Mr. YIN. Thank you, Mr. Chairman, Ranking Member Kelly, 
other Members of the Subcommittee and Committee. I am a law 
professor at the University of Virginia and a former chief of 
staff of the Joint Committee on Taxation. My testimony concerns 
the existing authority of the Committee to obtain and disclose 
the tax return information of any taxpayer, including the 
President, vice president, and any business that they own. I 
have three points to make.
    First, the chairman of the Committee may request the tax 
return information of any taxpayer from the Treasury Secretary, 
who is obligated to furnish it. I don't see any wiggle room in 
this statute for the Secretary to refuse a request. I believe 
Congress drafted the authority without conditions, to match the 
unrestricted right of the President at the time to access and 
disclose any tax return.
    Should the Secretary refuse, we would be in unchartered 
territory. The authority appears to have been rarely invoked 
since its creation in 1924, and I know of no instance when a 
request has been refused. If a court were to become involved, 
it might look to precedents involving congressional enforcement 
of a subpoena. Those cases generally indicate that Congress 
must act with a legitimate purpose, meaning, generally, a 
purpose consistent with its constitutional responsibilities. 
The chairman, therefore, would be well advised to request tax 
return information only if he has a legitimate purpose.
    Secondly, if it has a legitimate purpose, the Committee may 
submit any tax return information to the House. The present 
statute places no condition on this authority. But as 
originally passed in 1924, the Committee could submit only, 
``relevant or useful,'' information to the House, words that 
were removed by technical amendment in 1976.
    In recent research, I examined the meaning of these words 
very closely and concluded that they require the Committee to 
have, at a minimum, a legitimate purpose for submitting tax 
return information to the House. I also concluded that the 
meaning did not change even after the removal of the words in 
1976. I believe the amendment in 1976 was a mere technical 
drafting change with no substantive effect.
    In short, the Committee must have a legitimate purpose to 
submit tax return information to the House. Since the 
submission might result in public disclosure, the Committee 
should act only if it has a legitimate purpose to disclose the 
tax information to the public.
    Finally, since 1976, the tax committee authority to obtain 
and submit tax return information is the sole means by which 
Congress can make public disclosures of such information. The 
authority, therefore, should be interpreted in a manner that 
does not frustrate Congress' informing function with respect to 
such information.
    I provide an example in my testimony of why the legitimate 
purpose for tax committees to act should not be limited only to 
purposes within the specific legislative jurisdiction of the 
Committee. Rather, a permissible purpose should include any 
responsibility given to Congress under the Constitution.
    Congress, in effect, placed tax return information in a 
locked safe in 1976, but it preserved one key for purposes of 
disclosing the information to the public. It gave that key to 
the tax committees. The law, therefore, should be interpreted 
to enable the tax committees to use that key in appropriate and 
necessary circumstances.
    Thank you very much.
    Chairman LEWIS. Thank you very much, Professor Yin, for 
your testimony.
    [The prepared statement of Mr. Yin follows:]
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    Chairman LEWIS. Now, it is my pleasure to present Steven 
Rosenthal, a senior fellow at the Tax Policy Center.
    You may begin, sir.

 STATEMENT OF STEVE ROSENTHAL, SENIOR FELLOW, URBAN-BROOKINGS 
                       TAX POLICY CENTER

    Mr. ROSENTHAL. Chairman Lewis, Ranking Member Kelly, 
Members of the Subcommittee, and other Members of the Ways and 
Means Committee, thank you for inviting me to speak today on 
disclosing Presidential and vice presidential tax returns. My 
name is Steve Rosenthal. I am a senior fellow at the Tax Policy 
Center. I am speaking only on my own behalf, and my views 
should not be attributed to any other organization or person.
    I would like to highlight three points for my testimony. 
First, disclosing tax returns of Presidents, vice presidents, 
and candidates for these offices is important because it 
increases public confidence in the government in support for 
our voluntary tax system. As Ranking Member Kelly observed, our 
tax system is based on self-assessment. For it to work 
properly, taxpayers must be confident that it is fair.
    In my view, disclosure of tax returns to the public can 
help. Tax returns reveal effective tax rates, which is the 
amount of taxes divided by taxable income. Effective tax rates 
are useful to measure whether a taxpayer makes a fair share 
payment of taxes. Tax returns also show to the dollar the 
source and nature of income, losses, and deductions.
    Secondly, tax return information and other tax information 
of Presidents and vice presidents enhances the ability of 
Congress to oversee the executive branch, which is critical to 
our checks and balances. Congress may, for example, use tax 
information to evaluate the fairness of IRS audits, investigate 
potential financial conflicts, or to develop new tax 
legislation or other legislation.
    Thirdly, there are two paths to obtain tax information on 
Presidents and vice presidents. As Professor Yin has observed, 
existing law, section 6103(f) of the Tax Code, permits the 
Committee on Ways and Means to request tax information on 
Presidents or vice presidents that is held by the IRS. And new 
legislation, like H.R. 1, would require Presidents and vice 
presidents to disclose a minimum number of years of tax 
returns. Both paths are important, in my view.
    The existing Tax Code permits the Committee to request tax 
returns and other information held by the IRS. The scope of the 
Committee's request would be based on its purpose for the tax 
information. Some information, such as IRS audit work papers, 
would help the Committee evaluate the fairness of an IRS audit. 
Other information, such as related business and trust returns, 
would help identify potential financial conflicts. After 
reviewing the information, the Committee could exercise its 
discretion to determine whether and how to release it.
    Now, new legislation such as H.R. 1 can require Presidents 
and vice presidents to disclose publicly a minimum number of 
years of tax returns, but Congress cannot anticipate all of the 
information to require in the future. It may not foresee how a 
future President will make his or her income or what potential 
conflicts may arise. But Congress could still use section 
6103(f) to obtain extra years of returns or wider information 
on a President or vice president, if appropriate.
    In summary, the public would benefit from the disclosure of 
tax returns of Presidents and vice presidents and candidates 
for these offices. Congress would help fulfill its oversight 
responsibilities by obtaining tax information, and of 
presidents and vice presidents as appropriate. And there are 
two paths to obtain the tax information: One in existing law 
and one in proposed legislation. And in my view, both are 
important.
    I am happy to take any questions. Thank you.
    Chairman LEWIS. Thank you for your testimony.
    [The prepared statement of Mr. Rosenthal follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman LEWIS. Now it is my pleasure to present Mr. Noah 
Bookbinder. Thank you for being here. I think I remember in 
another time, another period, your father.
    Thank you for being here.

STATEMENT OF NOAH BOOKBINDER, EXECUTIVE DIRECTOR, CITIZENS FOR 
            RESPONSIBILITY AND ETHICS IN WASHINGTON

    Mr. BOOKBINDER. Chairman Lewis, Ranking Member Kelly, 
Members of the Committee, thanks so much for the opportunity to 
appear before you today to talk about key reforms included in 
H.R. 1, the For the People Act.
    My organization, Citizens for Responsibility and Ethics in 
Washington, or CREW, focuses on reducing the negative influence 
of money in politics, promoting ethics in government, and 
increasing transparency in our institutions. In all of these 
respects, the For the People Act is a vital first step in 
restoring trust in our democratic systems.
    I am here today to speak to one aspect of this important 
legislation: the need for transparency in Presidential and vice 
presidential tax returns. As others on the panel have 
explained, President Trump's continuing refusal to release his 
tax returns is a departure from the practice of candidates and 
Presidents of both parties over the last 40 years. The For the 
People Act would codify this commonsense principle of good 
governance for Presidents and vice presidents.
    There are a number of important things the public can learn 
from a President's or vice president's tax return. For example, 
the President could be concerned with whether the President, 
vice president, or a candidate paid his or her fair share of 
taxes. And if this seems like a far-fetched consideration, it 
is worth recalling the recent blockbuster report that President 
Trump's family appears to have engaged in an elaborate decades-
long tax avoidance scheme. Or the public could want to know 
more about how a President or vice president approaches 
charitable giving. In the case of President Trump, the public 
would be able to build on CREW's work and the subsequent work 
of New York's attorney general investigating how the President 
may have misused his now defunct charitable foundation.
    However, I would like to highlight one critical function of 
Presidential and vice presidential tax transparency: to 
identify and publicly expose potential financial conflicts of 
interest. If not addressed, these conflicts cast doubt on every 
aspect of a President's job. The past 2 years have demonstrated 
this in vivid detail. The public cannot currently have 
confidence in President Trump's decisions because his finances 
remain opaque. We cannot know if his decisions are made in the 
public's interest or in his own financial interest because we 
don't know what his financial interests are. These unknowns are 
particularly troubling given President Trump's decision to 
maintain ownership of his businesses while serving as 
President.
    Understanding President Trump's financial interests could, 
for example, shed light on exactly how he and his businesses 
will be affected by the massive tax legislation he championed 
last year. It could help us understand whether he is receiving 
funds from foreign sources, be they Russian, Saudi Arabian, 
Chinese, or otherwise. Or we could learn other things about his 
finances that we haven't even thought to ask yet. Ultimately, 
tax transparency would open the public's eyes to investigative 
threads that could lead to greater accountability for the 
occupants of our Nation's highest offices.
    The example of President Trump's tax returns demonstrates 
one way in which the current provisions in H.R. 1 should 
actually go further. Simply obtaining the President's 
individual tax returns will not necessarily shine light onto 
the hundreds of distinct corporations he owns under the 
umbrella of the Trump organization. It is equally, if not more 
important, to obtain the President's business tax returns, 
something that this legislation does not currently require. I 
would be happy to work with the Committee to update the 
legislation to include such a requirement.
    One justification President Trump has provided for not 
disclosing his tax returns is that his returns are under audit. 
As many have noted, this did not stop others in the past, 
including even President Nixon, from releasing their tax 
returns. But more importantly, Congress should consider whether 
the existing requirement that the IRS audit every President's 
and vice president's tax returns can realistically serve its 
purpose. Congress must question whether we can have full 
confidence in the IRS, which is overseen by a Presidential 
appointee, to thoroughly review the President's taxes.
    Public disclosure of the President's and vice president's 
tax returns can substantially mitigate these concerns. If the 
public can ultimately see what is filed, the IRS can be 
protected against charges that it was too easy or too hard on 
the President. Public review also has the added benefit of 
giving the American people a greater ability to evaluate the 
decisions made by the President and any conflicts that may 
affect these decisions, something an IRS audit cannot provide.
    I will close by reiterating an important point. By ensuring 
the transparency of Presidential and vice presidential tax 
returns, H.R. 1 would not only impact this current President, 
it would force every President and vice president and every 
major candidate for these positions in the future, regardless 
of party, to publicly disclose this information. This provision 
is nonpartisan.
    We must ensure the transparency we need at the highest 
levels of government in order to restore faith that our leaders 
are acting in the interest of the American people, not in their 
own interest. For all of these reasons, Congress should 
implement and indeed strengthen the tax return provision in 
H.R. 1.
    Thank you for the opportunity to address the Subcommittee 
today. I am happy to answer any questions Members may have.
    Chairman LEWIS. Thank you very much, Mr. Bookbinder. Good 
to see you.
    [The prepared statement of Mr. Bookbinder follows:]
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    Chairman LEWIS. Now it is my pleasure to welcome a 
gentleman back to the Committee who is not a stranger, Mr. Ken 
Kies, the managing director of the Federal Policy Group.
    You may begin, sir.

STATEMENT OF KENNETH J. KIES, MANAGING DIRECTOR, FEDERAL POLICY 
                             GROUP

    Mr. KIES. Thank you. Thank you.
    Chairman Lewis, Ranking Member Kelly, and distinguished 
Members of the Subcommittee, and also Members of the Ways and 
Means Committee, I am the managing director of the Federal 
Policy Group. Thank you for inviting me to speak on tax law 
related to Presidential and vice-presidential tax returns.
    During my time in governmental service as chief of staff of 
the Joint Committee on Taxation, as well as when I was the 
chief Republican tax counsel of Ways and Means, I have had the 
occasion to review the law surrounding the handling and 
disclosure of tax return information, as well as to advise 
Members of Congress with respect to thereto. And my comments 
today are informed by this experience.
    Section 6103(a) of the Internal Revenue Code specifically 
provides, quote, returns and return information shall be 
confidential, and except as authorized by this title, no 
officer or employee of the United States shall disclose any 
return or return information obtained by him in any manner in 
connection with his service as such an officer or employee or 
otherwise under the provisions of this section.
    The code provision has sometimes been described as a 
general prohibition on the disclosure of tax returns and tax 
return information. While I agree that the provision does 
prohibit disclosure, I note that the characterization of this 
rule as a general restriction is somewhat misleading. Instead, 
I would describe the provision as a blanket rule against 
disclosure by any authorized recipient of returns, with 
disclosure allowed in some limited situations that I will 
describe later.
    For purposes of this hearing, an even more relevant aspect 
of the blanket restriction as it pertains to Members of 
Congress and their staff is that the prohibition rule 
explicitly refers to returns obtained, quote, in any manner 
with any Member of Congress or employed by one, including 
returns that were obtained under the provisions of this 
section. This is a crucial point to remember when considering 
how the blanket rule against disclosure of returns relates with 
the limited exceptions provided in this section.
    Just because a Member of Congress or employee of such 
Member is entitled to have returns disclosed to him or her, 
that Member or employee is still prohibited from then 
disclosing the returns to another, unless further disclosure is 
explicitly allowed by reason of this section. To willfully do 
otherwise is to commit a felony punishable by up to 5 years in 
prison.
    As for the exception that is relevant to Members of 
Congress and their staff, I read the plain language of section 
6103(f) and find no comfort whatsoever that any public 
disclosure of tax returns is clearly permitted. A sentence in 
section 6103(f) does refer to one of the three listed 
committees submitting returns it has received to the Senate or 
House or both. This sentence explicitly says nothing about 
permitting disclosure to the public. It likewise says nothing 
about public disclosure being permitted when Members have a 
valid legislative purpose and does not say that the permissive 
disclosure to the Senate or House overrides the blanket 
restrictions.
    Thus, since every disclosure of returns is prohibited 
unless it is explicitly allowed, the only conclusion I could 
feel safe adopting is the disclosure can be made by a listed 
committee to the House or Senate Members generally but that 
such disclosure can go no further unless permitted by some 
other section of which there is no relevant part.
    Further, while I acknowledge the existence of a colorable 
argument that the so-term speech and debate clause of the U.S. 
Constitution could prevent prosecution of a Member of Congress 
or staff member for a violation of the tax return 
confidentiality rules so long as the act was undertaken in 
furtherance of the performance of their legislative tasks, I 
would observe that this clause has never been tested or applied 
by the Supreme Court in the context of a felony violation under 
Section 6103. Thus, if I were advising a Member of Congress and 
any of their staff, I would tell them I could provide them no 
firm comfort on what this clause actually allows them to do 
with respect to tax returns when they have legally received 
them under Section 6103. In my mind, the risk to such Members 
and staff is grave when one considers the potential penalties.
    Given everything I have briefly described above, I would 
never feel comfortable advising a client that he or she could 
safely disclose, let alone make public, any tax return in a 
manner that was not unequivocally enumerated in Section 6103. 
In my capacity as chief of staff of the Joint Committee on 
Taxation, I never did so nor would I have counseled any of my 
staff, any Member of Congress, or any congressional staff to 
ever do so.
    That concludes my formal remarks. I thank the Subcommittee 
for this attention, and I welcome any questions.
    Chairman LEWIS. Thank you very much, Mr. Kies, for being 
here.
    [The prepared statement of Mr. Kies follows:]
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    Chairman LEWIS. I want to thank each member of the panel 
for being concise. And we want you to continue to give a short 
answer.
    The hearing is now open for questions. I ask that each 
Member follow the 5-minute rule. And all Members should have an 
opportunity to ask and answer questions, if we follow the 5-
minute rule. That is for the panel also. Okay?
    Professor Yin, does the tax law provide any basis for the 
Secretary of the Treasury to refuse a request for tax 
information from the Committee?
    Mr. YIN. The statute provides no basis for a refusal.
    Chairman LEWIS. Furthermore, Professor Yin, can a person 
release his or her tax return while under audit?
    Mr. YIN. I know of no restriction that would prevent a 
taxpayer from disclosing information even if it is under audit.
    Chairman LEWIS. Well, we have heard some people say, I have 
been audited and I cannot release any information.
    Mr. YIN. Well, I think that if I were advising a client and 
my client's return were under audit, I may well want to have 
the client not share the information very broadly. And I would 
provide that advice to the client. But if the question is: 
there anything under the law that would prevent a taxpayer from 
disclosing information that is under audit, the answer is I 
don't know of any such prohibition.
    Chairman LEWIS. Thank you very much, Professor.
    I now yield my remaining time to Mr. Pascrell. You have 
been a leader in this effort.
    Mr. PASCRELL. Thank you, Mr. Chairman. Thanks for holding 
the hearing, and thanks for your courtesies.
    Every President should release his or her tax returns to 
the public as a matter of course. And when we have cause for 
concern over conflicts of--or tax violations, we have every 
reason to use the authority given to this Committee. The law is 
on our side. 6103 is very clear. 6103(f) is even clearer, that 
section of it, of what we have the responsibility to do. For 2 
years, I have been highlighting this Committee's authority to 
do so.
    We introduced the Presidential Tax Transparency Act along 
with Representative Anna Eshoo of California. Our bill would 
require every Presidential and vice presidential candidate to 
release their tax returns to the public. I am pleased our 
proposal is part of H.R. 1, the first bill introduced by 
Democratic Members of the House in this Congress.
    This Committee has oversight over our Nation's tax system 
and laws. In fact, the Ways and Means Committee has oversight 
over IRS. Our tax system requires honesty from taxpayers and 
from the IRS.
    The element of good faith is implicit to a functioning tax 
system. If a President is cheating the system or evading taxes 
or otherwise violating the tax laws of our country, why should 
any citizen feel compelled to comply? No one is above the law.
    I want to get into questions, because we have great 
witnesses who have laid it out better than I can. But before I 
do, I want to enter into the record, Mr. Chairman, with your 
approval, three specific articles that I think go to the very 
center, the very heart of this issue. And we're introducing 
them now.
    I ask unanimous consent to enter into the record the 
chronology of actions taken by this Committee and by the full 
House by using 6103 to obtain the President's tax returns so 
that the record has that. The record illustrates the broad 
support.
    Chairman LEWIS. Without objection.
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    Mr. PASCRELL. Thank you. Mr. Rosenthal have you ever looked 
at a President's tax returns? And if so, what did you find, 
since you participated in that expose last summer in the New 
York Times, to some degree? What did you find, Mr. Rosenthal?
    Mr. ROSENTHAL. So I have worked at the Tax Policy Center 
for 7 years. I have been through two Presidential cycles.
    Mr. PASCRELL. Could you speak up, please.
    Mr. ROSENTHAL. I have worked at the Tax Policy Center for 7 
years. I have been through two Presidential cycles. I have been 
asked many a questions about what has been released by 
candidates and officeholders.
    With respect to, say, President Trump, I have seen or at 
least believe to have seen his 2005 and 1995 returns which, in 
my judgment, showed some aggressive tax planning. I spent a lot 
of time with The New York Times and other media helping to 
translate what you see when you find glimpses of an 
officeholder's tax returns. And we have been able to determine, 
in some instances using other court documents and the like, for 
instance, the most likely source of the $916 million of losses 
that the President generated in the 1990s and could have 
eliminated his taxes for a couple of decades.
    So I have seen a lot, and I have published my findings in 
various periodicals, and there is a lot to find.
    Mr. PASCRELL. Mr. Chairman, thank you for yielding, and I 
appreciate it very much. We will be back later.
    Chairman LEWIS. Thank you very much.
    I understand now that Mr. Kelly would like to defer till 
later.
    I now recognize the gentlelady from Indiana for 5 minutes.
    Mrs. WALORSKI. Thank you, Mr. Chairman. Thank you to you 
experts that are here. We so much appreciate it. I am grateful 
for the information you bring with you.
    I would like to direct my question to Mr. Thorndike. Are 
Presidential candidates required to release their tax returns?
    Mr. THORNDIKE. No, they are not.
    Mrs. WALORSKI. In your experience researching the history 
of Presidential returns, is there a set of rules that governs 
what Presidential candidates do and do not have to release?
    Mr. THORNDIKE. There are no written rules. There are norms, 
but that is hard to describe them as, like, well defined.
    Mrs. WALORSKI. Or required. Right.
    So Presidential candidates can choose what tax return 
information, if any, to release. Isn't that correct?
    Mr. THORNDIKE. Yes. And, indeed, they have, which is why 
they have varied quite so dramatically over time.
    Mrs. WALORSKI. So, Mr. Thorndike, how many years of returns 
is typical for a Presidential candidate to release?
    Mr. THORNDIKE. It is really not possible to answer that 
word typical--with anything. I mean, it ranges from 1 to 33.
    Mrs. WALORSKI. So there is no set number.
    Mr. THORNDIKE. And there is not even, really, a trend. I 
mean, there are some single releases in the beginning. There 
are a couple recently that released only two. But Jeb Bush 
released 33 this last time around.
    Mrs. WALORSKI. Right. There is no set number.
    Mr. THORNDIKE. There is no obvious trend.
    Mrs. WALORSKI. Right. Then in the 40-plus years of 
Presidents and Presidential candidates releasing their returns, 
have they ever released the returns of businesses in which they 
have some form of involvement, that you are aware?
    Mr. THORNDIKE. So I cannot answer that question 
definitively, because we don't actually have a lot of those 
returns which were released as part of a campaign but are not 
archived anywhere, so we don't know where they are anymore.
    Senator Romney did--when he ran, he did release returns for 
some of his family trusts. Those are the only ones that I am 
certain about.
    There are a few times when candidates or, more 
specifically, the spouses of candidates have refused to release 
tax returns related to trusts or other businesses. Once 
Geraldine Ferraro's husband and then again Senator Kerry's 
wife.
    Mrs. WALORSKI. But to summarize your responses, Mr. 
Thorndike, Presidential candidates are not required to release 
their returns. There is no standardized process for releasing 
Presidential returns. The level of disclosure varies widely, 
and business income tax returns have not been a part of the 
disclosure process.
    So, really, Mr. Thorndike, what we are talking about here, 
and I believe you called this voluntary disclosures, what we 
are talking about here is an informal tradition. It is not a 
law.
    Mr. THORNDIKE. It is not a law. And it is an informal 
tradition, a long one, but as I say in my testimony, I think 
those sorts of traditions are not the way to handle these sorts 
of issues. If we believe that this kind of disclosure is 
important enough that we want them to do it, then we should 
require it. If we don't think it is that important, then we 
don't need to require it. I don't think we should let a 
tradition handle it.
    Mrs. WALORSKI. And yet we are holding this hearing today 
under the guise of an academic discussion when in reality this 
is all about weaponizing our tax laws to target a political 
foe. Doing this, I believe, sets a dangerous precedent, eroding 
the very laws put in place to protect the private tax return of 
each and every American.
    Privacy and civil liberties should still matter in this 
country. And I, for one, am here to protect those, every single 
individual in this country, every single American.
    And with that, Mr. Chairman, I yield back.
    Chairman LEWIS. Pursuant to the committee rule 14, and 
based on the Members in attendance, we will question the 
witness two Democrats to one Republican.
    The chair now recognizes Ms. DelBene.
    MS. DELBENE. Thank you, Mr. Chairman. And thanks to all our 
witnesses for taking your time to be with us today.
    I want to start with you, Mr. Kies. Given your testimony, 
would you have advised Committee Republicans to release 
taxpayer information in 2014?
    Mr. KIES. No, I would not have advised them to do that.
    Ms. DELBENE. Thank you. Also, current policy requires that 
Presidential tax returns be automatically reviewed, but I am 
concerned that the IRS may not have the ability to accurately 
and fairly carry this out free from political pressure.
    So, Professor Yin, according to the report on the 
impeachment hearing, President Nixon reportedly received a 
letter from the IRS stating, quote, our examination of your 
income tax returns for the years 1971 and 1972 reveal that they 
are correct. I want to compliment you on the care shown in the 
preparation of your return, end quote.
    Upon exam, a congressional investigation found that 
President Nixon actually owed nearly $480,000. What does this 
show about the ability of the IRS to impartially review the 
President's tax returns?
    Mr. YIN. Congresswoman DelBene, I can't comment on the 
impartiality. I think it is suggestive that there was a 
problem. Whether it is simply incompetence or partiality, I 
don't know.
    In fact, what happened in that instance is, after the 
Congress--the Joint Committee did its determination, the IRS 
went back and actually audited again and essentially confirmed 
the Joint Committee's determination and reversed its own first 
determination. So there was obviously a problem with the first 
audit, but I can't tell you whether it was out of a feeling of 
partiality or whether there was undue influence or simply some 
people weren't doing the job they were supposed to be doing.
    Ms. DELBENE. But by allowing others to review those 
documents, we were able to find out that they were not actually 
correct.
    Mr. YIN. Well, I think it certainly raises an issue that 
might be worthy of the Committee's concern, which is that if a 
very high-ranking official is being audited, whether it is the 
President or the Treasury Secretary or somebody of that nature 
who has a supervisory role over the auditors, it seems to me 
that it might be a good policy for the Committee to double 
check that type of situation.
    Ms. DELBENE. Thank you.
    Dr. Thorndike, given the current pressures on the IRS and 
what happened with Nixon, should the IRS requirement to audit 
tax returns of Presidents and vice presidents be codified?
    Mr. THORNDIKE. As with the disclosure requirements, I think 
that these would be better off codified than handled through 
the internal policies of the IRS. And to just--I just wanted to 
add that, during that Nixon episode, there was very real debate 
and real concern about the sufficiency of an IRS audit. And 
there were calls for outside auditors. Or what that even meant, 
they weren't sure. And eventually their answer was the joint 
committee could be that outside auditor. But there was real 
concern that the IRS had missed this the first time through. 
Part of the explanation is that they actually had a change of 
commissioner in the middle of that, and the new commissioner, I 
think, took a much more vigorous approach to this.
    But I think it is quite reasonable for people now to worry 
based on the actual experience in the Nixon Administration that 
the IRS may not be able to really vigorously enforce the law 
relative to the President. I think they try very hard. I don't 
mean to slander the IRS. I see this as a structural problem, 
not as a criticism of the IRS itself.
    Ms. DELBENE. Thank you.
    Professor Yin, I will go back to you. The Committee must 
make a written request to receive a return. Is there any 
limitation on what returns or return information can be 
requested?
    Mr. YIN. No, there is no limitation. The Committee can ask 
for anything it wants. I think good practice would suggest that 
the Committee be somewhat targeted in its request simply 
because it would take a lot of time if the requests were very 
broad.
    Ms. DELBENE. Thank you. Thanks to all of you.
    And I yield back, Mr. Chairman.
    Chairman LEWIS. The chair now recognizes for 5 minutes Ms. 
Sanchez.
    Ms. SANCHEZ. Thank you, Mr. Chairman. And to our witnesses, 
your testimony has informative as we work through this very 
important issue, so I want to thank you, first and foremost, 
for being with us.
    I think it is long past time for this Committee to do its 
constitutional duty and operate as a coequal branch of 
government. And I can say that I have been proud to be part of 
the Committee and House floor efforts to properly exercise our 
authority. Because as Members of Congress, we take an oath to 
uphold and defend the Constitution. And when we swear that 
oath, we recognize our responsibility and our duty to uphold 
the integrity of this institution. Holding the executive branch 
accountable is a bear minimum step, I think, in fulfilling that 
constitutional duty.
    To me, here the facts are pretty simple. The American 
people deserve a full picture of potential conflicts of 
interest for those who have the privilege of holding the 
highest elected offices in our country or those who aspire to 
hold them.
    Transparency is a pretty good thing. The American people 
have the right to know the financial interests of those that 
are crafting policy that affect them. And hearings like this 
and passage of legislation like H.R. 1 will move our country 
forward, not backward, in the issue of transparency.
    Since this Administration began, we have seen countless 
examples of why this information should have been disclosed, 
like in every other Presidential candidate in modern history 
has done before for the last several decades.
    From tax reform to dealing with foreign entities and 
individuals, the American people deserve to know exactly 
whether their executive stands to personally benefit or be 
unduly influenced. The personal business endeavors of the 
leader of the free world should be held to very high standards 
indeed.
    Dr. Thorndike, you previously mentioned that you would like 
to see the release of tax returns codified. Are you worried 
that this tradition, because it is just a tradition right now, 
is being eroded?
    Mr. THORNDIKE. I am concerned that it may, in fact, be 
completely broken. And I think that we can't count on 
traditions.
    Again, if we believe that this sort of transparency is 
important, and I do, then we can't really depend on a tradition 
to get the job done. And, I mean, just as an example of that, 
let's think about the--maybe the most hallowed tradition in 
American politics, which was the two-term Presidency which was 
revered by everyone until it wasn't. And when Franklin 
Roosevelt broke that tradition, Congress responded by actually 
making it a law--or the Nation responded by making it a part of 
the Constitution.
    I think if things are important enough, and I believe that 
transparency is one of those things, we should, in fact, 
require them legally, rather than just hectoring people to try 
to get them to do what we want them to do.
    Ms. SANCHEZ. I happen to agree.
    And, Mr. Thorndike, if Presidential hopefuls' tax returns 
are released, they are redacted so that sensitive information 
like Social Security numbers and other important information is 
not released to the public. Is that correct?
    Mr. THORNDIKE. Yes. Social Security numbers have been 
blacked out for a long time. They were not originally. I think 
this was before the era of rampant identity theft. But they 
have been now, and they are routinely. I mean, Presidents have 
been blacking them out for 40 years.
    Ms. SANCHEZ. Thank you.
    Professor Yin, you just heard Mr. Kies' testimony. Do you 
have any comments with respect to his testimony?
    Mr. YIN. Yes, I do. I think a few words of history would 
help to clarify the misunderstanding that Mr. Kies seems to 
have on this point.
    In 1924, when Congress began thinking about the law that is 
before us today, Secretary Mellon vigorously objected and was 
concerned specifically about the potential disclosure of the 
tax return information to the public. And he urged over on the 
Senate side in a Senate hearing two changes. One is, he said, 
any committee that receives the information must do it in 
closed session. And, second, if any of the information goes to 
the full House or full Senate, it also must be done out of 
public eye with nothing included in the Congressional Record.
    Congress in 1924 agreed with the first step, which is why, 
if you were to seek information today, you would need to do it 
in closed session. But it specifically rejected the second 
step. And the reason was that it was inconsistent with the 
congressional goal in 1924, which was, as a coequal branch of 
government, it wanted to give itself the exact same rights as 
the President. The President at the time had the ability to 
obtain and disclose anybody's tax returns.
    Fast-forward to 50 years later, the same issue arose in 
1976. And what Congress did is they took away the ability of 
nontax committees to make disclosures, but they did not take 
away the tax committee right.
    If I could add one final point, which is that some of you 
may be wondering, well, why does the statute, as Mr. Kies 
suggests, the statute only says you may ``submit'' and not make 
a public disclosure? And although I don't find anything 
specific in the historical record on that point, I think there 
is a very easy explanation. And it goes to the fact that in the 
mid 1920s, party affiliation was not nearly as important as it 
is today. There were a lot of progressive Republicans who 
tended to vote with Democrats on issues like this one, issues 
of disclosure, investigations, and so forth.
    Meanwhile, Congress was controlled by the old guard 
Republicans. The leaders of Congress did not want a single 
committee to make the determination of whether something is 
disclosed to the public or not, because they didn't know what 
the specific makeup of that committee might be. It might have a 
number of progressive Republicans on it who would vote in favor 
of disclosure. They wanted the full House or the full Senate to 
make that determination, and that is why they developed this 
procedure where all the Committee can do is to submit----
    Chairman LEWIS. Thank you, Professor.
    Mr. YIN [continuing]. To the House and Senate.
    Ms. SANCHEZ. Thank you. I am sorry. My time is expired.
    But, Mr. Chairman, I would ask unanimous consent to submit 
a letter from the former acting director of the Office of 
Government Ethics, Don Fox, in support of Title X of H.R. 1.
    Chairman LEWIS. Without objection. Thank you very much.
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     Ms. SANCHEZ. Thank you, Mr. Chairman.
    Chairman LEWIS. The chair now recognizes for 5 minutes Mr. 
LaHood.
    Mr. LAHOOD. Thank you, Mr. Chairman, I want to thank the 
witnesses for your testimony here today.
    In a prior career, I was honored to serve as a Federal 
prosecutor and a State prosecutor. I appeared before many grand 
juries. Section 6103 under the statute allows the Federal grand 
jury to subpoena tax records.
    I guess as I look at this issue, obviously, it is not a 
surprise to anybody, we have an ongoing independent counsel 
investigation, a grand jury that has been impaneled for over 18 
months. Out of that grand jury investigation have been a number 
of indictments related to tax fraud.
    Clearly under this grand jury, the independent counsel, as 
with others over the last 40 years, there is the broad 
authority to go after tax records, look at criminal violations, 
and look at civil violations. I have no doubt that is ongoing 
today.
    I guess as I look at this, I am a little perplexed and 
confused on why we would give the authority or why we would 
have the chairman of the Ways and Means Committee ask the 
Department of Treasury for the President's tax records.
    As I look at the last 40 years of the independent counsel 
investigation statute, I have been trying to figure out whether 
there has been another example of this. I have not seen any so 
that causes me some real concern.
    I guess, Professor Yin, you are the historian. Can you 
provide the Committee with an example of where the chairman of 
the Ways and Means Committee has asked the executive branch for 
their taxes when there is an ongoing Department of Justice 
independent counsel investigation?
    Mr. YIN. Congressman LaHood, I can't think of an example 
off the top of my head, but I think it is important to 
understand----
    Mr. LAHOOD. Thank you. Reclaiming my time.
    Would it surprise you to learn that one does not exist?
    Mr. YIN. Well, again, I can't think of one off the top of 
my head. The authority itself has been rarely invoked, so----
    Mr. LAHOOD. Thank you.
    Mr. YIN [continuing]. It is clearly just a handful of 
situations.
    Mr. LAHOOD. Thank you.
    Dr. Thorndike, can you provide the Committee with an 
example of where the chairman of the Ways and Means Committee 
has asked for the President's tax records when there is an 
ongoing independent counsel Department of Justice 
investigation?
    Mr. THORNDIKE. No.
    Mr. LAHOOD. Do you have any evidence to support that that 
has been done in the past?
    Mr. THORNDIKE. I am not aware of anyone having requested 
the President's tax returns in the past.
    Mr. LAHOOD. While there is an ongoing independent counsel 
investigation?
    Mr. THORNDIKE. Yeah, I mean--I mean, I--but has there ever 
been any--have they ever requested one?
    Mr. LAHOOD. Again, would it surprise you to learn that that 
in fact has not happened?
    Mr. THORNDIKE. No.
    Mr. LAHOOD. Okay. Mr. Rosenthal, same question to you. Can 
you provide the Committee with an example of when that has 
occurred?
    Mr. ROSENTHAL. I am unaware of a historical record on this 
point.
    Mr. LAHOOD. Thank you.
    Mr. Bookbinder.
    Mr. BOOKBINDER. I guess I would say that I believe the 
Presidents have voluntarily disclosed their tax returns while 
under independent counsel investigation. So I am not sure the 
issue would have come up.
    Mr. LAHOOD. So let me ask you on that point, Whitewater was 
an independent council investigation, correct? During that 
time, do you know if the Ways and Means chairman asked for the 
President's tax records?
    Mr. BOOKBINDER. I don't know, but I believe the President 
voluntarily disclosed them.
    Mr. LAHOOD. So President Clinton voluntarily disclosed 
them. Is that your testimony today?
    Mr. BOOKBINDER. You know, I would really defer to the 
historians, but my sense is that for 40 years, Presidents 
routinely have voluntarily disclosed tax records.
    Mr. LAHOOD. Would you be surprised to learn that the 
chairman of the Ways and Means Committee has never asked for 
that with an ongoing independent counsel investigation?
    Mr. BOOKBINDER. I don't have any reason to think 
differently than the historians on this panel.
    Mr. LAHOOD. Well, thank you for that.
    I guess going back to my original thoughts on this, as I 
look at it, we have had approximately 30 independent 
investigations by DOJ. The broad authority that they have, like 
this independent counsel has, is real. So to think that this 
Committee would want to be engaged in asking the Department of 
Treasury for the President's tax records again is confusing to 
me. It has never been done. And as I look at what this 
Committee should be based on, this seems to me like a waste of 
time of resources and energy here.
    As we talked, Professor Yin, you did a great job talking 
about the legitimate purpose for why this should be used. I 
look at the legitimate purpose and the legal purpose on this 
and I do not see it. I go back to what a number of my 
colleagues said on weaponizing the Tax Code and setting a 
precedent that has never been done. We should all be concerned 
about that.
    Thank you. I yield back.
    Chairman. LEWIS. The chair now recognizes for 5 minutes Mr. 
Suozzi.
    Mr. SUOZZI. Thank you, Mr. Chairman. Thank you so much for 
conducting this hearing. And thank you to the witnesses for 
your time and for your expert opinions.
    Dr. Thorndike, I was going to ask this question, but just 
in response to my friend Mr. LaHood's questions, did President 
Clinton voluntarily disclose his tax returns?
    Mr. THORNDIKE. Yes, every year that he was in office and 
while running.
    Mr. SUOZZI. So there would be no need for the chairman of 
Ways and Means to ask for his tax returns despite the fact 
there was an investigation going on because they were disclosed 
publicly?
    Mr. THORNDIKE. Yeah. I mean, more generally, there would 
have been no need to request any President's tax returns in the 
last 40 years because they have all been a matter of public 
record.
    Mr. SUOZZI. Okay. I really want to focus on H.R. 1 and the 
conflict of interest questions. That is the thing that I am 
most concerned about. We have a duty here to try and protect 
the American people and to make sure that we are doing our 
jobs. This can't be a partisan thing; it has got to be 
something we are doing to follow our duties under the 
Constitution to make sure that the public has the information 
that they need.
    Mr. Thorndike, you told me earlier that your doctorate is 
in history of 20th century politics in America. So what would 
be examples of conflicts of interest that someone might have 
had throughout history or maybe something that was uncovered in 
some of these disclosures that have taken place? Or if you 
can't think of a specific instance of something that has been 
discovered, what would you speculate could be a potential type 
of conflict? Give us, like, real type of examples.
    Mr. THORNDIKE. Well, I mean, I am not aware of there ever 
being any discovery of financial conflicts of interest 
involving an American President. They may have been there and 
not revealed. Most Presidents have put their assets in blind 
trusts, so it is not clear whether or not the President would 
even be aware of what those conflicts might be.
    I mean, you know, one could imagine that any piece of 
legislation, if it is going to change the Tax Code in a way 
that benefits the President, might be of relevance to the 
President. Is that a conflict of interest? I mean, that is hard 
to know.
    Mr. SUOZZI. Well, it is really the appearance of a conflict 
of interest is what we are most concerned about, isn't it?
    Mr. THORNDIKE. Yes.
    Mr. SUOZZI. For example, President Johnson had a lot of 
business interest, for example. Would there be potential 
conflicts of interest based upon your knowledge of his history?
    Mr. THORNDIKE. I would imagine so. I mean, this was before 
Presidents with releasing their tax returns, so we wouldn't 
know exactly what they are.
    Mr. SUOZZI. So, Mr. Bookbinder, you talked about different 
types of conflict of interest that could potentially exist. 
What are the ones that you are concerned about most?
    Mr. BOOKBINDER. Well, I would just first of all say that a 
part of the reason why it is hard to find a historical example 
is because no President has retained massive global business 
interests the way that President Trump has previously. So we 
are really in unchartered territory here. But I would be very 
interested in the most basic conflicts kinds of questions in 
terms of how would the President's own tax interests be 
affected by the changes to the tax law he has made.
    And then we have also seen that this President has had 
extensive business dealings with foreign interests. That is 
something we could learn more about from--potentially from tax 
returns. That could be incredibly----
    Mr. SUOZZI. How would we find them in a tax return, you 
know, if it is his individual tax returns? Would the individual 
tax returns be sufficient or would you need to see his business 
tax returns as well?
    Mr. BOOKBINDER. I mean, of course it is hard to know 
exactly what would be in his tax returns. It may well be that 
if he is receiving foreign income, that he would be disclosing 
that. But certainly with the kinds of very complex business 
interests with literally over 500 different interrelated 
companies that this President has, it points out the importance 
of getting those business tax returns, which are going to give 
a lot more--potentially a lot more information about where the 
money is coming from and what----
    Mr. SUOZZI. So it doesn't have to be specific to President 
Trump, but could you give an example of a foreign interest in a 
business that would be a conflict for a chief executive?
    Mr. BOOKBINDER. I mean, certainly--really almost--for 
instance, if there were--if a President had an LLC or some 
other kind of company which had a foreign--which had a partner 
that was a foreign company, potentially----
    Mr. SUOZZI. So an investor could be someone from a foreign 
country that you could have undue influence?
    Mr. BOOKBINDER. Exactly.
    Mr. SUOZZI. What would be a type of businesses that a 
President could have an interest in that, if money was brought 
in through that business, would potentially impact the 
President's decision or vice president?
    Mr. BOOKBINDER. Well, for instance, a lot of foreign 
governments have very extensive funds that invest in 
businesses. And so if there was a sovereign fund that was 
putting money into, say, a construction project, if there was a 
Saudi fund or a UAE fund, that could affect the way the 
President looks at any decision that involves that country, 
conceivably.
    Mr. SUOZZI. Okay. My time is about to expire.
    I yield back, Mr. Chairman. Thank you.
    Chairman. LEWIS. Thank you very much.
    Now that you are recognized for 5 minutes, Ms. Chu.
    Ms. CHU. Mr. Yin, I understand that the chair of Ways and 
Means has the authority to ask for the President's tax returns. 
Then Ways and Means can vote to submit it to the House, and 
then the House can vote to make the returns public. Mr. Kies 
made a startling assertion when he said that if the Committee 
votes to release any tax return information to the full House, 
it would risk a criminal violation. In fact, he talked about a 
felony that would be worth 5 years in prison. Based on your 
expertise, do you agree with his interpretation?
    And I would like to also ask, do we indeed have the legal 
authority to obtain these tax returns and to submit it to the 
House to make it public? And why is it that we have had this 
authority for 100 years?
    Mr. YIN. Thank you, Congresswoman Chu. I don't agree with 
his view. I think that the historical record is very clear as 
to what the intention of Congress was in creating this 
authority for the tax committees, and it was to allow the 
potential of a public disclosure. I think that to think 
otherwise right now would require us to believe that Congress 
forfeited its ability to exercise its informing function with 
respect to tax return information. That is, nobody could ever 
inform the public about any matter of importance to the 
government if it involved the disclosure of tax return 
information without suffering a criminal penalty. I don't 
believe that is the case. That would be an inconceivable 
outcome, in my view.
    And I would further add that in the few instances where 
this authority has been used, in every single instance, there 
has been a public disclosure at the end of that exercise of the 
authority. And I just commend to you the floor statement of 
former Ways and Means chairman, Wilbur Mills, in 1974 when he 
submitted the Nixon report to the House and he explained in 
just a few paragraphs exactly his understanding of what he was 
doing and why he was doing it. And it is exactly consistent 
with the idea that he was doing it so that the report could 
become public.
    Ms. CHU. Mr. Bookbinder, some opponents of requiring the 
disclosure of Presidential tax returns as written in H.R. 1 
argue that candidates are already required to file a financial 
disclosure form or OGE Form 287e. Can you explain the primary 
differences between the information found on the disclosure 
form and the information found on a tax return and why it would 
be critical, in fact, to have a tax return involve a financial 
disclosure?
    Mr. BOOKBINDER. Sure. There are a number of differences. 
One of the most stark ones is that, for instance, for income on 
a financial disclosure, any income over $5 million is simply a 
box that says over $5 million. So somebody could be making $6 
million or $600 million and we wouldn't know the difference 
looking at their financial disclosure form. Obviously, a tax 
return is going to be much more precise. There are a lot of 
areas from loans to investment partners where we are likely to 
get very different information from the tax returns than we get 
from the personal financial disclosure form.
    Ms. CHU. How about the issue of whether the candidate has 
paid taxes or has avoided taxes?
    Mr. BOOKBINDER. Absolutely. And the personal financial 
disclosures are not going to provide any information about what 
taxes somebody paid, they are not going to give any information 
about charitable giving. And those are things that are 
potentially very important for the American public in 
evaluating a candidate and evaluating a President.
    Ms. CHU. And, Mr. Rosenthal, you said--you discussed when 
it would be appropriate to submit a request under Section 6103, 
for instance, when there has been a refusal by the office 
holder to divest financial interests in a large empire or a 
refusal to transfer their interests in a blind trust. Why is it 
important for Congress to obtain the office holder's tax 
returns and other tax information?
    Mr. ROSENTHAL. Well, in my written testimony, I described 
the unusual circumstances in which the Committee might seek 
information from tax returns, one of which being if the 
President has not divested his financial interests in a 
sprawling business or transferred to a blind trust. In that 
circumstance, the possibility of the President having income 
from many different sources is pretty likely. And so to see 
those partnership returns and the business returns could be 
pretty important. I would point out, as Congressman Suozzi was 
asking the other witness here about partnership returns, I 
could tell you line 16 of the partnership return asks: ``does 
the partnership have any foreign partners.'' Line 20 of the 
partnership return asks: ``enter number of partners that are 
foreign governments.''
    And so when there is a sprawling global economic empire 
that is comprised of LLCs and partnerships around the world, 
there are just a lot of questions to be asked. The 1040 is 
merely the collector of composite information without 
disclosing the kinds of detail you might like to have.
    Mr. SUOZZI. Mr. Chairman, let the record reflect that my 
name is Suozzi, not Suozzi.
    Mr. ROSENTHAL. I apologize.
    Ms. CHU. I yield back.
    Chairman. LEWIS. Thank you.
    The chair now recognizes for 5 minutes Dr. Wenstrup.
    Mr. WENSTRUP. Thank you, Mr. Chairman. I appreciate that.
    Let me start with you, Mr. Kies. What is the purpose of the 
IRS?
    Mr. KIES. To collect the revenue to fund the Federal 
Government.
    Mr. WENSTRUP. What is the purpose of an audit conducted by 
the IRS?
    Mr. KIES. To hopefully make sure that people, when they are 
voluntarily complying, are actually--are complying with the 
statues of which are, in some cases, quite complex, but that is 
the purpose of audits.
    Mr. WENSTRUP. And the President and vice president get 
audited every year?
    Mr. KIES. Correct, according to law now.
    Mr. WENSTRUP. Okay. So, Mr. Pascrell, you said something 
before that really hit home. You said no one is above the law, 
and I agree with you 100 percent.
    Is it the law that the President or vice president bring 
forward their tax returns to the American people?
    Mr. KIES. Is it the law that what?
    Mr. WENSTRUP. Is it a law that the President or vice 
president bring their tax returns forward to the American 
people?
    Mr. KIES. As I think we have confirmed----
    Mr. WENSTRUP. We have seen testimony on that. That is not 
the law.
    Mr. KIES. That is correct.
    Mr. WENSTRUP. And no one is above the law. But at the same 
time, no one should be forced to violate a law that maintains 
their privacy. You know, as a doctor, I think about what we go 
through to make sure we understand HIPAA and the privacy of our 
patients and how important that is. And is there for a reason. 
That privacy is there for a reason for patients to be protected 
from disclosure their private information and especially about 
their healthcare or other personal information. Why is that? In 
part, because people can take something from their health 
record and possibly use it for nefarious means or for political 
purposes, if they so choose. That is the purpose of that, 
whether it is an innocent part of your healthcare record or 
not.
    So I kind of look at this the same way. I also want to 
bring up, maybe any of you can tell me, and I know in the past, 
some Presidents have put forth their health record, and given 
the results of their entire physical. Is that true? Can anyone 
attest to that? I know you are mostly tax experts, but is that 
true?
    Mr. KIES. And some have not.
    Mr. WENSTRUP. And that should be their choice. That should 
be their privacy. We have the checks and balances in place. We 
have the audits in place. But people, every American, deserves 
their privacy. I compare the two. Let's take an example. And I 
was not around to necessarily know, but America did not know 
that President Roosevelt could not stand. My guess is maybe he 
wanted to keep that private so it wasn't used against him for 
nefarious purposes.
    I think of the privacy of American citizens at every level, 
whether it is their healthcare or their tax returns. There are 
other checks and balances in place for the President and vice 
president, and they have their rights, just like each and every 
one of us.
    With that, I would like to yield the balance of my time to 
Mr. Kelly.
    Mr. KELLY. Thank you, Doctor.
    Just while you are all there, I am trying to understand 
this, is there anybody that doubts that the President or the 
vice president's tax returns are not being audited by the IRS?
    Mr. PASCRELL. Right here.
    Mr. KELLY. Doctor. Dr. Thorndike.
    Mr. THORNDIKE. I don't doubt that they are being audited.
    Mr. KELLY. Professor Yin.
    Mr. YIN. I really don't have any knowledge on that.
    Mr. KELLY. Oh, yes, but you do. You are the historian. Are 
you are telling me that you don't know that the President and 
the vice president's taxes are being audited?
    Mr. YIN. I know what is in the IRM, but I don't know 
whether in fact that is being carried out. I have no knowledge 
of that.
    Mr. KELLY. Okay.
    Mr. Rosenthal.
    Mr. ROSENTHAL. Like Professor Yin, I have read the Internal 
Revenue Manual which calls for----
    Mr. KELLY. So the fact that we all know that they get 
audited to the fact that you weren't there to see the audit, 
makes you wonder if it actually is being done?
    Mr. ROSENTHAL. Whether the President is being audited or 
not is tax return information and cannot be disclosed, and so 
to ask----
    Mr. KELLY. Not until we had this meeting tonight.
    Mr. ROSENTHAL. Not until a law were passed.
    Mr. KELLY. Okay. I get it. I get it.
    Mr. Bookbinder.
    Mr. BOOKBINDER. No, the same. We certainly don't know what 
manner of audit was done, assuming it was done.
    Mr. KELLY. Okay.
    Mr. Kies.
    Mr. KIES. I think it is highly unlikely that the IRS is not 
auditing the President and vice president, given what their own 
Internal Revenue Manual says. I find that inconceivable.
    Mr. KELLY. I think we all know that, especially if I was a 
historian that studied this, I would have pretty good idea of 
what is taking place.
    So the only difference tonight is we are talking about the 
ability to make this President, this duly-elected President's 
tax returns public.
    Thank you. I yield back.
    Chairman. LEWIS. The chair now is pleased to recognize for 
5 minutes Ms. Moore.
    Ms. MOORE. Thank you so much, Mr. Chairman. And I am, 
again, so pleased to be a Member of this Subcommittee and 
appreciate the witnesses for their patience today.
    I just came off of the Financial Services Committee to--on 
this body, and one of the things that we were looking at was 
the unusual lending pattern of Deutsche Bank to the President 
of the United States. Deutsche Bank had a subsidiary called 
VTB--I can't say the Russian name, so VTB. And at some point--I 
am just giving you background for my question--Donald Trump had 
borrowed $600 million and owed another $300 million, and they 
had called for a $40 million payment and he said, as a result 
of an act of God, the financial meltdown in 2007, 2008, that he 
shouldn't have to pay it back. He was in court in New York. 
Didn't want to pay Deutsche Bank back. Suddenly, he left the 
commercial real estate division of Deutsche Bank and went to 
the private wealth fund, VTB Bank, a bank that certainly had 
many Russian oligarchs who invested in that. Suddenly, his debt 
was paid off and they offered him an additional $25 million.
    VTB Bank also is associated with this spy that was just--
the sanctions removed and so on and so forth. So other banks 
couldn't believe it, they said are you F'ing, kidding when 
Donald Trump was given this loan by Deutsche Bank.
    So we have a letter here from our distinguished Ranking 
Member saying if there are valid concerns with financial 
disclosures, then let's come together to legislate a thoughtful 
solution to require additional disclosures. And this has been 
quoted a lot by Members here. And so I am wondering, will--he 
goes on to say that we ought to improve our ethics laws. Are 
there any ethics laws or any audits that will help us get to 
this unusual lending activity under Deutsche Bank that any of 
you on the panel can think of? Dr. Thorndike, Dr. Yin, Mr. 
Bookbinder.
    If we want to look at the business transactions, the line, 
line--did you say line 40 on the 1040, that is going to give us 
the information that we need regarding these business 
partnerships, relationships, and loans.
    Yes, sir.
    Mr. YIN. Just a quick comment. I think that tax return 
information may provide useful leads for additional inquiries 
along the lines that you are describing. I am not suggesting 
that the tax return information in and of itself would find 
some smoking gun that would satisfy your inquiry. But there may 
well be useful leads that you could pick up from the tax return 
information that, with additional inquiries----
    Ms. MOORE. Do you think IRS audits would give us that lead, 
or voluntary disclosures of just the front page of the 1040 
versus the attachments?
    Mr. YIN. No. I am sorry, Congresswoman Moore. I am talking 
about if the Committee were to seek information, they would 
then have whatever return information that they sought. And 
from that information, that there may well be helpful leads 
along the lines of your inquiry.
    Ms. MOORE. Do any of you--Mr. Bookbinder, the distinguished 
Ranking Member said that we ought to strengthen our ethic laws. 
What ethic laws is he referring to that we could strengthen in 
order to clear up this mystery about Deutsche Bank's 
relationship with Trump and the Trump organizations? By the 
way, Trump Tower was supposed to be built by VTB, the 
subsidiary of Deutsche Bank. Can you just tell us what ethic 
laws we could strengthen that would give us this information 
versus these tax returns?
    Mr. BOOKBINDER. Well, I do certainly think there is room to 
make the financial disclosure forms more rigorous than they 
currently are. I also think, especially with a President and a 
vice president where conflicts of interest are so important, 
you really need all the information you can get. And tax 
returns are going to provide more information on this kind of 
question than probably you would ever be able to get in a 
financial disclosure form that all government--all senior 
government officials have to fill out.
    Ms. MOORE. And just reclaiming my last 10 seconds. You 
know, I just would appeal to my colleagues to not accuse us of 
lazy legislating to ask for these tax returns when we have such 
a conflicted President.
    And with that, I yield back.
    Chairman. LEWIS. The chair now recognizes for 5 minutes Mr. 
Boyle.
    Mr. BOYLE. Thank you, Mr. Chairman and Mr. Ranking Member, 
and I thank the witnesses.
    Under the Constitution and our system of checks and 
balances, Congress has not just the right, but the 
responsibility to oversee whether our laws are faithfully 
executed by the executive branch. In accordance with this duty, 
almost a century ago, Congress explicitly enumerated this 
Committee's right to review any return or return information in 
the aftermath of two crises of public trust; two scandals, 
incidentally, which have remarkable parallels to the present 
day and this President.
    One was the Teapot Dome scandal where senior officials in 
the Harding Administration granted public oil field leases in 
exchange for bribes. And the other involved, as was previously 
referenced, Treasury Secretary Andrew Mellon, who continued to 
own many business interests while serving in government. Sounds 
familiar. Some believe the Bureau of Internal Revenue, as it 
was then called, gave him and his businesses preferential 
treatment.
    So, again, the parallels between the scandals of a century 
ago that gave birth to this 1924 law and the present day are 
really remarkable. For example, President Trump maintains a 
sprawling business empire, which he refuses to transfer to a 
blind trust. According to multiple published reports, the 
President, through his businesses, derives income from foreign 
governments and their lobbyists, which also may violate the 
Constitution's prohibition against emoluments.
    The President reportedly intervened personally to block the 
FBI from moving its headquarters, and thus, opening up for 
commercial development a site just a few blocks from his 
downtown Washington hotel. The President reportedly paid little 
or no tax for many years, in part because of aggressive tax 
planning and in part, perhaps, tax evasion.
    Finally, his foundation and inaugural committee are 
currently under criminal investigation.
    So I would open it up really to any one of you to comment 
on what I have had to say about the historical precedent that 
gave birth to this important law and the current facts as we 
know them. Professor Yin and then Mr. Rosenthal.
    Mr. YIN. I would just say briefly that I completely agree 
with your point of the parallels of what happened almost 100 
years ago that caused this law to be developed and the current 
time. I think the parallels really are very close.
    Mr. ROSENTHAL. Congressman, I would just add that the use 
of 6103(f) authority is use designed to further a legislative 
purpose, the checks and balance of our constitutional system. I 
do not believe the use by this Committee to try to reaudit the 
President is what this Committee would be pursuing. Of course, 
it is your purposes and goals that would need to be achieved. 
However, the conflicts that we are discussing, the conflicts 
with respect to the execution of the Office of the President, 
the conflicts with respect to whether audits are being run 
correctly, the conflicts with respect to whether or not the 
President is running the country for his benefit or for ours, 
those are all conflicts that are within the purview of the 
legislative branch to determine with respect to the executive 
branch.
    Remember, in my view, the legislative branch oversees the 
executive branch, not the other way around, and we have one 
President who runs it.
    Mr. BOYLE. Well, it is not just your view, it is also 
explicit in the United States Constitution, so I obviously 
agree.
    Mr. KIES. Can I----
    Mr. BOYLE. One final kind of specific in-the-weeds point on 
this. The distinction between personal returns and business 
returns. In your view, would also looking at the business 
returns be necessary in order to address some of the questions 
that we have?
    Mr. ROSENTHAL. So, yes. Let me quote the current IRS 
commissioner who during the campaign said: To fully understand 
the financial status of Trump, one would need to see his 
returns from multiple years, the work papers for the individual 
returns, and the returns for numerous related entities.
    If you look to the President's own lawyers who wrote a 
letter describing whether his tax returns reflected Russian 
entanglements, they said that, and they looked at the 500, 
business entities that were listed on President Trump's 
financials and are linked and the income flows through to his 
returns, I don't think there is any question, but if you want 
answer some of the questions that have been raised at this 
hearing, you would have to have business returns.
    Mr. BOYLE. Thank you. I am out of time. I yield back.
    Chairman. LEWIS. Thank you so much. I thank all of the 
Members for your participation.
    The chair now recognizes for 5 minutes Mr. Arrington.
    Mr. ARRINGTON. Thank you, Mr. Chairman. And Mr. Kies--and 
thank you, witnesses.
    Mr. Kies, you look like you might want to comment on that 
last question and dialogue.
    Mr. KIES. Well, the only comment I was going to point out 
is that there clearly are ways in which the financial 
disclosure rules could be modified to make them much more 
useful and much more informative without getting tax returns. 
But this issue of whether or not the current statute is a 
consequence of what happened back in the 1920s I think is 
misguided. It is more a function of what happened in the 1970s. 
In fact, when Congress rewrote Section 6103 in 1976, it was 
because they were concerned that Richard Nixon and his White 
House were handing out tax return information all over the 
place. And that is why Congress, this Committee, wrote as tight 
a provision as Section 6103 as it exists today.
    And contrary to what my friend George Yin suggested as my 
misunderstanding, I don't have a misunderstanding of the 
statute. I encourage all the Members of the Committee to 
actually read the statute. It is unequivocal in terms of what 
it says.
    Mr. ARRINGTON. Are you trying to tell me that in the 1970s, 
there were actually petty, self-serving, politically motivated 
people in this line of business?
    Mr. KIES. It is hard to believe, but yes. That is correct.
    Mr. ARRINGTON. And that is why we tightened up the 
restrictions, so that we wouldn't open up people's tax returns 
to political abuse of power?
    Mr. KIES. The difference between the 1976 rules, which is 
basically what we have today, versus pre-1976 was fundamental. 
It referred to tax returns prior to 1976 as public property, 
public information. The 1976 act, which basically is what we 
have today, tightened those rules down immeasurably, and it is 
reflected in 6103(a), which is the only provision of Section 
6103 that contains a substantive penalty for failure to comply 
with it. The rest of 6103 is a bunch of procedural rules.
    And with all due respect to my friend George Yin, he is 
looking at 1920s legislative history to try and inform us as to 
what this provision means today. I strongly encourage every 
Member of the Committee to actually read the statute.
    Mr. ARRINGTON. Mr. Kies, I am surprised that with a panel 
of experts, tax experts, experts on this issue, that when asked 
if they believed that the IRS was fulfilling its duty to 
execute on mandatory annual audits for the President, that 
there was great uncertainty. It seems like we have a very 
distrustful panel, but I would give them the opportunity again 
if they believe in fact that those mandatory audits are going 
on.
    But before that, if they are going on--and I am going to 
assume that the IRS is doing its job in auditing this 
President--would the issues like effective tax rates and 
whether the President is paying his taxes or if he is evading 
them or sources of income loss and deduction, those things that 
Mr. Rosenthal mentioned, would those not be discovered in an 
audit? If there were problems with that, would those not be 
flags, red flags that would come up in such an audit? Yes or 
no.
    Mr. KIES. Certainly, all of those things would be 
information which the IRS could get. And I guess I would say in 
response to the issue of whether or not people believe that the 
President and vice president are being adequately audited, I 
will say, for me personally, and I would speak for everybody in 
this room, I don't think you want to have done to you what 
probably is being done in the form of the audits to the 
President and vice president. I suspect they are pretty 
intense.
    Mr. ARRINGTON. So nobody up here is against improving 
transparency and identifying information where it would present 
a better picture of potential conflict of interest? I think of 
financial disclosure forms, ethics forms, there are plenty of 
other ways that we can do this without opening up such abuse 
that occurred in the 1970s. Abuses which then transpired into 
more restrictions to prevent that abuse of power.
    Mr. Rosenthal, do you have confidence in the American 
people's judgment when it comes to this issue of disclosure of 
people's tax returns, the President's in particular?
    Mr. ROSENTHAL. Well, I have seen polls----
    Mr. ARRINGTON. Do you trust the judgment on this issue?
    Mr. ROSENTHAL. I have seen polls that more than 60 percent 
of the American public believe the President should, you know, 
disclose his tax returns. Those have been almost constant since 
the campaign.
    Mr. ARRINGTON. Mr. Rosenthal, did you see the election 
results? Because this was an issue during the Presidential 
election. If I recall, this was an issue in the primary, it was 
an issue in the general when candidate Hillary Clinton 
disclosed her tax returns. So the American people were well 
aware of this. And I have got a whole lot more confidence in 
the American people than they have in this body to conduct 
themselves in an objective and fair manner when it comes to 
these sorts of issues.
    I am very concerned with giving this body politic more 
power to abuse, not only this President, but potentially the 
American people.
    Mr. Chairman, I yield back.
    Mr. ROSENTHAL. I would just say I don't know what to make 
as a matter of policy from the election. The American people 
may have expected the legislative branch to continue to oversee 
vigorously the executive branch and may have expected further 
oversight.
    Chairman. LEWIS. Thank you very much.
    The chair now recognizes for 5 minutes Mr. Gomez.
    Mr. GOMEZ. Mr. Chairman, thank you so much. Thank you for 
having this important hearing.
    I find it interesting on a couple of things. First, on the 
question of is it required by law. It is not required by law 
that a Presidential candidate submit their taxes, to reveal 
them. But as a matter of custom and practice, that is what has 
been done since the early 1970s. And it is oftentimes somebody 
who comes along and rips apart that custom that then the body 
politics, the legislative branch or the public itself has to 
take action to codify that custom and practice. We do that all 
the time here in the House where there was unwritten rules, our 
custom and practice and then somebody breaks them, and then the 
House takes action to codify those. This is just another 
example of taking that step, as part of H.R. 1 to take that 
step to require all Presidential candidates and vice president 
candidates to reveal their tax returns.
    You had a good historical point where I was actually 
thinking the same thing regarding the two term. A lot of things 
over time in our history of government were custom and practice 
and somebody came along and broke it, and then we passed a law 
to fix it. So on that issue, let's set that one aside.
    On the issue of excuses. First, the President when he was a 
candidate said his tax returns were under audit, he couldn't 
return them. Now, the gentlemen on the other side of the aisle 
are saying that it is under investigation by the special 
counsel. Sooner or later, I am going to hear that a dog has 
eaten his tax returns, and I don't know even if this President 
has a dog. So we hear one excuse after excuse. And our 
responsibility is to see if there is a reason to go after, a 
legitimate reason.
    Mr.--just to kind of clarify some of the rule and authority 
of this Committee. Mr. Yin, you mentioned--there was a 
discussion on post-1976 rule. What facts give you the 
understanding that we do have that authority and we continue to 
still have that authority today?
    Mr. YIN. Thank you, Congressman Gomez. I completely agree 
that the 1976 act was designed to strengthen taxpayer privacy. 
That was the overriding goal, without any question. But it 
should be noted that in 1976, Congress specifically took away 
the ability of nontax committees to submit information to the 
House or the Senate and to have a public release of it. They 
amended the statute to say that any submission could only take 
place while the full House and the full Senate are sitting in 
closed executive session.
    Importantly, even though they obviously had the ability to 
put the same condition on the tax committee submission, they 
did not. And my reading of that is that Congress wanted to keep 
at least one vehicle open to preserve its informing function 
relative to tax return information. If it had imposed the same 
restriction on the tax committees, then, in effect, Congress 
would have said nobody ever has an opportunity to inform the 
public if it relates to tax return information. And I find that 
result completely inconceivable.
    And so I believe that the history of this provision, which 
was unchanged in 1976 relating to the tax committees, prevails 
in explaining exactly what the authority of the Committee is.
    Mr. GOMEZ. And just to reiterate, to really kind of focus 
in, why is Congress so committed to retaining that authority?
    Mr. YIN. Well, I think Congressman Boyle said it very 
correctly, which is that one of the principles, if not the most 
important responsibility of Congress, is to make sure that the 
laws are being faithfully executed by the agencies and by the 
high-ranking officials--that serve the country. And so it is 
important then to have the ability to inquire about whether 
those laws are being faithfully executed, and to the extent 
that Congress were to find that there has been a violation, it 
certainly is the congressional responsibility to inform the 
public of that. That seems like a very foundational 
responsibility of Congress.
    Mr. GOMEZ. That is the basis of our government, right? 
Checks and balances. And without that ability to do that, then 
we don't have a check on the executive branch.
    Mr. YIN. Exactly right.
    Mr. GOMEZ. I yield back.
    Chairman. LEWIS. The chair is pleased to recognize Mr. 
Pascrell for 5 minutes. And I apologize for passing you over.
    Mr. PASCRELL. No problem, Mr. Chairman.
    Mr. Chairman, I want to enter into the record the articles 
How a Simple Tax Rule Let Donald Trump Turn $916 Million Loss 
Into a Plus; second, Trump Engaged in Suspect Tax Schemes as He 
Reaped Riches From His Father; number three, Trump Foundation 
Will Dissolve, Accused of ``Shocking Pattern of Illegality.'' I 
didn't mention those articles, now I mention those articles. 
Put them in the record. My request. Thank you.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

 Mr. PASCRELL. Mr. Chairman, I can't--I must be--it is going 
to take time for my questions. Thank you. About hypocrisy, 
hypocrisy. So we want to protect the privacy of the President, 
and I would too, but we don't want to follow law. When I said 
no one is above the law, I mean, no one is above the tax law. 
And in this case, the tax law is 6103. It is the law of the 
land. When Democrats and Republicans feasted on scandal and 
bribery. That is the law of the land.
    So he is not above the President of the United States. 
President Trump is not above 6103. And it pertains to everybody 
in the executive branch of government, not just the President. 
Because Secretary Fall, who was the Secretary of the Interior 
at the time, is the one who put this scheme together, and went 
after him back in 1923. Okay. That is what happened.
    So, Mr. Kies, thank you for joining all these great people 
like yourself. I have read your stuff. We don't agree on some 
things and we do agree on some things. What do you know about 
that?
    So, Mr. Kies, do you believe--this is a different part of 
the question. Do you believe Committee Republicans violated the 
law in 2014 when they released taxpayer information, over 50 
taxpayers, and they found nothing? Do you believe they violated 
the law?
    Mr. KIES. Absolutely.
    Mr. PASCRELL. Thank you very much, Mr. Kies. Thank you for 
your honesty. That is what I expected.
    So let me have a question here for Mr. George Yin, 
Professor Yin. Some on this Committee have claimed that 
releasing the tax returns of the President under 6103, that 
authority to be a political abuse of power. By the way, we sent 
numerous letters to Mr. Brady when he was the chairman of the 
Committee saying let's do this together so it is not partisan. 
Bull to what they are saying today.
    Professor Yin, you have written about this Committee's use 
of 6103, this Committee, to obtain and release the tax 
information of more than 50 taxpayers in 2014. That happened 
along partisan lines. Republicans voted to release the 
information, Democrats are opposed. Can you explain your 
thoughts on the Committee's use of 6103 in 2014?
    Mr. YIN. Congressman Pascrell, I would be happy to. In that 
instance, the Committee did release the tax return information 
of, by my count, 51 separate organizations, with almost half of 
them having multiple pieces of tax return information 
disclosed. And I looked very closely at that whole situation. 
Forty-one of the organizations had absolutely nothing to do 
with the specific Committee investigation and allegations 
relating to Lois Lerner and the IRS and the purported 
discrimination by the agency against right-leaning exempt 
organizations. They had absolutely nothing to do with it. And 
so the release of those the information for those 41 seemed to 
me to be a clear violation.
    The other 10 organizations, which were all right-leaning 
exempt organizations, the Committee's allegations with respect 
to them were that they weren't processed quickly enough. The 
allegations did not go to the substance of the actual 
applications themselves. And so it seemed to me that if the 
Committee wanted to publish a letter indicating the objection 
as to how it viewed the IRS and Ms. Lerner's treatment, they 
there was absolutely no reason to name the organizations and to 
reveal any tax return information. They could have made exactly 
the same point as the Treasury Inspector General had made just 
a few months earlier in bringing the matter up to the attention 
of the Committee by referring to 10 right-leaning exempt 
organizations or 10 Tea Party type organizations, or whatever 
name would be appropriate, to provide the general sense without 
necessarily naming and revealing any tax return information. So 
I concluded all 51 disclosures were a violation of the law.
    Mr. PASCRELL. Mr. Chairman, thank you for your courtesies 
and your indulgence. This is a very critical issue for the 
American people who are interested in this subject. We are not 
interested in getting someone; we are interested in following 
the law. Period. That is it. Give us the chance to do that. 
Give us a chance--what am I saying? Give us a chance to follow 
the law, and that is what we are doing, and we will not stop. 
Thank you.
    Chairman. LEWIS. Thank you, Mr. Pascrell.
    The chair is now pleased to recognize Mr. Ferguson, 5 
minutes.
    Mr. FERGUSON. Thank you, Mr. Chairman. And I would like to 
yield as much time as he may consume to my colleague, Mr. Rice.
    Mr. RICE. Mr. Pascrell said that we need to follow the law, 
right? We need to follow the law.
    Mr. Thorndike, can you cite any statutory authority as a 
law that requires the President to disclose his tax returns?
    Mr. KIES. There is no requirement that the President----
    Mr. RICE. Mr. Yin.
    Mr. YIN. Nothing in the law right now.
    Mr. RICE. Okay, thank you.
    Mr. Rosenthal.
    Mr. ROSENTHAL. None to my knowledge.
    Mr. RICE. Mr.--I can't read it. I am sorry.
    Mr. BOOKBINDER. Bookbinder.
    Mr. RICE [continuing]. Bookbinder.
    Mr. BOOKBINDER. No current law, though there is a bill that 
you are discussing----
    Mr. RICE. Mr. Kies, what is the statutory requirement?
    Mr. KIES. There is none.
    Mr. RICE. There is none. So we are following the law. And, 
you know, why would we want the President to be required to 
disclose his tax returns? I mean, it has been real clear from 
the testimony of all of the witnesses here that we want to 
check for conflicts. I mean, really that is the primary reason, 
right? We want to see personal benefit or conflicts. So why 
hadn't we thought about that till now? Oh, wait, we have.
    Doesn't the President have to make disclosures, Mr. 
Thorndike, Dr. Thorndike?
    Mr. THORNDIKE. In what sense, disclosures----
    Mr. RICE. Doesn't he have to make financial disclosures?
    Mr. THORNDIKE. Yes, but that is not--those are not--that is 
not necessarily what we are talking about, I don't think.
    Mr. RICE. Well, I mean, the Ethics in Government Act of 
1978 requires personal financial disclosure forms by the 
President and all Members of Congress as well, right?
    Mr. THORNDIKE. It is true, but if the President----
    Mr. RICE. And it is very detailed about what we have to 
disclose. I mean, we have to disclose--I am a CPA, I am a tax 
lawyer.
    Mr. THORNDIKE. It is true----
    Mr. RICE. We have to disclose a lot more information than 
you have to disclose on a tax return about ownership, about 
percentages, about--you know, in fact, Ms. Moore was asking, 
she would like to know more about the President's loans at 
Deutsche Bank. I just pulled up the President's forms, it is 
108 pages long. The loan to Deutsche Bank is listed right 
there, the rate, when the loan matures, the amount of the loan.
    Could you look at the President's tax return, Mr. Kies, and 
determine what the rate was on his Deutsche Bank loan?
    Mr. KIES. I think it is probably unlikely.
    Mr. RICE. Yeah. And would you even know he borrowed the 
money from Deutsche Bank if you were looking at his tax return?
    Mr. KIES. It is unlikely. Probably the only way you would 
know these things is by, and as has been pointed out by some of 
the other witnesses----
    Mr. RICE. Now, if Congress thought, you know, if the 
government thought that disclosing tax returns should be 
required, Mr. Rosenthal, could we not have required that in the 
ethics acts of 1976?
    Mr. ROSENTHAL. At the time, there were voluntary 
disclosures going on, it may not have been viewed as necessary.
    Mr. RICE. Could we have required that, Mr. Bookbinder? Yes 
or no.
    Mr. BOOKBINDER. Yes.
    Mr. RICE. Yeah, of course we could--but we didn't think it 
was sufficiently important to require it. We don't think it is 
sufficiently important unless it is our political enemy.
    Mr. Pascrell was talking about hypocrisy. I will tell you, 
the Democrats are about anything hypocritical. They love to 
weaponize the IRS, a/k/a Lois Lerner and now going after the 
President's tax returns.
    I think in the STOCK Act, we recently reviewed this ethics 
disclosure, and we tightened it up, what, 2 or 3 years ago. So 
this is something that is not new. This is something that has 
been considered over and over again. It has been tightened more 
and more. And, you know, in our zeal, in the zeal of my friends 
across the aisle to attack this President, to weaponize 
agencies of the Federal Government, including the FBI and the 
DOJ and now the IRS, to pursue him with any means possible, now 
they want to go after his tax returns when it is not required, 
it has never been required. We could have required it any time 
we thought it was appropriate. We could have passed the law.
    There is a prospective bill put out there now that may be 
considered at some point and, hell, maybe it will pass, but 
there is nothing that requires the President to disclose his 
tax returns. To say that the President is not complying with 
the law is an abject falsehood. It is an abject falsehood.
    One more time. Mr. Kies, is the President required to 
disclose his tax returns?
    Mr. KIES. No.
    Mr. RICE. Thank you, Mr. Chairman. I yield back.
    Chairman. LEWIS. The chair is pleased now to recognize the 
gentleman from Texas, Mr. Doggett.
    Mr. DOGGETT. Thank you very much Mr. Chairman.
    We, today, pursue two issues. One is how to address with 
new legislation a situation where a future President might 
decide to reverse himself or herself the way President Trump 
did and not make available tax returns as all recent candidates 
for President have done. And the second is to look at the basis 
and the process under a law that is almost a century old that 
gives the chairman of this Committee the authority to review 
tax returns, and if this Committee so decides, that it is in 
the public interest for this Committee to vote to send that 
information to the House where it can eventually be made a 
matter of public interest.
    I, seeing the President's reversal, his entanglement with 
interest abroad and at home, seeing reports that he and his 
family may have benefited in excess of $1 billion from the tax 
bill that he forced through here without a single person from 
his Administration coming to testify in favor of it or explain 
it, seeing all that, I moved on six different occasions in this 
Committee over the last 2 years to use 6103 to obtain the 
President's tax returns. And each time, there were excuses and 
coverup from our Republican colleagues as they obstructed and 
protected the President.
    Now, the President apparently had enough concern about this 
that he did have a review made of his tax returns. The review 
was made by the President's own lawyers; in fact, from a firm 
that proudly declares that it was the Russia law firm of the 
year that made the review of his returns, noting not only that 
he had personal returns, but more than 500 separate entities, 
entities that stretch from Azerbaijan to Panama. And they gave 
him an all clear, this personal law firm, of that. And I 
suppose that is a kind of review, but it is not one that 
inspires public confidence.
    The Commissioner of the Internal Revenue Service, Charles 
Rettig, before he was appointed, said that, quote: For wealthy 
individuals, individual tax returns sometimes only provide a 
brief financial overview linked to numerous other conclusions 
and entities. To fully understand the financial status of 
Trump, one would likely need to see returns from multiple 
years, the work papers for the individual returns, and the 
returns for numerous related entities.
    Mr. Rosenthal, do you agree with that statement?
    Mr. ROSENTHAL. Yes, I do.
    Mr. DOGGETT. And while having a President with such a 
sprawling business empire may be unprecedented, we know there 
are others. Some have already announced as possibilities as 
independents or Democrats for the 2020 election. Every 
President, vice president, and candidate for the future, I 
think, should be held to the same standard that we would apply 
to President Trump.
    Mr. Bookbinder, do you believe that H.R. 1 should be 
strengthened to include a requirement that all candidates 
disclose their business entities?
    Mr. BOOKBINDER. Yes. I think recent events make clear that 
that is really important.
    Mr. DOGGETT. And, Mr. Rosenthal, might such information 
inform how much weight is given to a given policy of the 
President of the United States?
    Mr. ROSENTHAL. Yes. Those type of disclosures would inform 
Congress' weight and deference to executive action.
    Mr. DOGGETT. We know that the President plays a central 
role in tax policy, that his Office of Management and Budget 
offers a review of tax regulations that he lobbies for and 
influences and signs legislation, that the Treasury Department 
that he appoints plays a big role.
    With these multiple roles that the President plays on tax 
policy, is it essential, Mr. Rosenthal, that we have his 
returns to review the impact on those policies?
    Mr. ROSENTHAL. Yes. I believe the regulatory process and 
the discretion the President has with that process, warrant the 
Congress and this Committee understanding what financial 
interests he might yet have.
    Mr. DOGGETT. Thank you.
    And, Professor Yin, an important point, while our focus in 
this Committee is the tax system and the public confidence in 
that system and whether this President is using his office for 
personal gain, the responsibilities when you talk about the 
legitimate purpose for using 6103, doesn't that extend to many 
other issues, such as his possible violation of the emoluments 
clause, his entanglement with Russians and Saudis and others 
who he may be doing business with or for? Because this 
Committee has a responsibility broader than just its own 
jurisdiction over the tax cut.
    Mr. YIN. Congressman Doggett, I believe you are right, and 
that is simply because Congress right now has delegated, 
exclusively to the tax committees this ability to inform the 
public about tax return information. So I believe that the 
legitimate purpose for the Ways and Means Committee would 
extend to a constitutional responsibility of Congress and not 
be limited to the legislative jurisdiction of the Committee.
    Mr. DOGGETT. And just one final one, Mr. Chairman.
    And, Professor Yin, is it also not true that this 
Committee, should it decide to make these records public, has 
powers that even the special counsel, Mr. Mueller, does not 
have?
    Mr. YIN. Yes. That is a very valid point. And that is, 
again, another issue down the road, which is that the special 
counsel can disclose tax return information only in limited 
circumstances, such as a judicial or administrative proceeding. 
If he were to issue a report, it is not clear whether tax 
return information that might be critical to his conclusion in 
the report could, in fact, be revealed to the public, even 
assuming the Attorney General were to allow the report to be 
revealed at all. So that is another issue.
    Mr. DOGGETT. Thank you, Mr. Chairman. And I just would ask 
unanimous consent to include in the record a--the testimony of 
Public Citizen concerning its support for the disclosure of 
Presidential and vice presidential tax returns, and the 
important report of Americans for Tax Fairness, The Case for 
Congress Obtaining Trump's Tax Returns.
    Chairman. LEWIS. So ordered.
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     Mr. DOGGETT. Thank you for your tolerance.
    Chairman LEWIS. Now it is my pleasure to recognize the 
gentleman from California, Mr. Panetta.
    Mr. PANETTA. Thank you, Mr. Chairman. I appreciate this 
opportunity, and thank you for letting me sit in on this 
hearing. I appreciate that.
    Gentlemen, thank you very much for being here today as well 
as your preparation for your testimony today too.
    As you heard from one of my colleagues, and as you know 
well, there is no law requiring a taxpayer to turn over the tax 
returns to this Committee, correct, Mr. Yin?
    Mr. YIN. You are referring to the President?
    Mr. PANETTA. Yes.
    Mr. YIN. There is no law that requires that, that is 
correct.
    Mr. PANETTA. But there is a law saying that this Committee 
can obtain those tax returns, correct?
    Mr. YIN. That is correct.
    Mr. PANETTA. Okay. And that is 6103, subdivision F, 
subdivision 1, correct?
    Mr. YIN. That is correct.
    Mr. PANETTA. And it actually says that any taxpayer shall 
furnish the tax returns to the Committee, correct?
    Mr. YIN. It says the Treasury Secretary shall furnish the 
requested information to the Committee.
    Mr. PANETTA. Exactly. So that is not a should or a could 
have or a would have. It is a shall. It must if we ask for 
that, correct?
    Mr. YIN. That is correct.
    Mr. PANETTA. Okay. Great.
    And, Mr. Yin, I am going to focus on you. Gentlemen, please 
excuse me, but I am going to focus on Mr. Yin, if that is okay.
    In your testimony, Mr. Yin, you basically talk about--on 
page 2, you talk about--this is your formal written testimony--
you talk about the situation where there would be a refusal to 
turn over these tax returns in this situation that we have been 
talking about and that most likely you say that it would lead 
to the courts. It would be a potential judicial resolution, as 
you say, correct?
    Mr. YIN. It might. It depends on how the Congress reacts to 
that refusal. Obviously, Congress could simply say, well, okay, 
that is too bad. Or Congress could try to enforce its request, 
and that might end up in court.
    Mr. PANETTA. Understood. And if it went to a court, what is 
your--how do you think these courts would look at that 
situation? What would they use?
    Mr. YIN. Well, again, as I indicated in the testimony, I 
think we are in unchartered territory, because I don't think 
the specific issue has ever arisen before, at least I am not 
familiar with it. But there is a little bit of law about 
enforcing congressional subpoenas, and this would be somewhat 
analogous to that. And the law generally says that Congress 
must act with a legitimate legislative purpose.
    Mr. PANETTA. And in regards to the case law that talks 
about a legitimate purpose, can you go into a little bit more 
detail behind those words?
    Mr. YIN. Yes, I would be happy to. So the foundational case 
was an 1880 case, the Kilbourn v. Thompson case. And that 
involved a situation where Congress was making an investigation 
relating to a bankruptcy. And there was a settlement, and there 
was a particular company that was affected by it. And the 
congressional inquiry essentially went to the nature of that.
    The party that was being subpoenaed refused, and so this 
eventually went to the Supreme Court. And the court found that 
it could not find any legislative purpose for this inquiry. The 
court said there is no legislation envisioned in this conflict 
that has arisen. And, in fact, the court said, we can't even 
imagine how there would be any legislation relating to it. It 
said, essentially, if this is a conflict, it is a conflict for 
the courts. It is a conflict for the judicial branch to 
resolve, not the legislative branch to resolve. And in that 
instance, the court concluded that the legislative inquiry was 
not going to be enforced.
    Mr. PANETTA. Okay.
    Mr. YIN. There are other examples, obviously, I can give 
you.
    Mr. PANETTA. Please, in regards to any that have been 
enforced.
    Mr. YIN. Yes. Certainly. Well, so in 1927, there was 
another Supreme Court court case, the McGrain v. Daugherty 
case. Daugherty, in this particular case, was the brother of 
the former attorney general, Harry Daugherty. Harry Daugherty 
had been one of the principals allegedly involved in some of 
the Teapot Dome matters.
    And in this instance, Congress was seeking testimony and 
documents from the brother of Harry Daugherty to, again, 
complete the investigation of this. And the brother refused. So 
this also went to the Supreme Court. And in that case, the 
court made it very clear that there was an appropriate 
legislative purpose to investigate the possible wrongdoing in 
the executive branch and, therefore, did enforce that request.
    Mr. PANETTA. And these are the types of cases you believe 
that courts will look at for precedence, correct?
    Mr. YIN. Well, again, it is speculation on my part. But it 
would be--I would think, if I were a judge or the clerk for the 
judge, that would be certainly an area that I would direct the 
attention to.
    Mr. PANETTA. Thank you.
    I yield back my time. Thank you again, Mr. Chairman.
    Chairman LEWIS. Thank you.
    The chair now recognizes for 5 minutes Mr. Reed.
    Mr. REED. Thank you, Mr. Chairman.
    This has been a very insightful panel, and I appreciate the 
testimony of the witnesses.
    But as I venture down my questioning, I just want to make 
sure we are clear. I have heard from each one of the witnesses 
that there is a right-to-privacy issue here based on the 
historical review of the documents from each of their 
testimony. Does anyone disagree with the issue or concern that 
is legitimate being raised on the rights of privacy of 
individuals under 6103 or this proposed law, and that we need 
to take that into consideration? Does anyone disagree with 
that? Mr. Yin.
    Mr. KIES. One thing I would say in response to that, and it 
is something that no one on the Committee has asked about yet, 
but I think it is an important piece of information. 6103 has 
never ever been used to request taxpayer information by the 
Ways and Means chairman, the Finance Committee chairman, or the 
chief of staff of the joint committee that has been released 
publicly.
    Professor Yin referred to the Nixon situation. Nixon had 
agreed to let his return.
    When I was chief of staff of the joint committee in 1985, 
we requested individual income tax returns in connection with 
our study of why wealthy Americans were giving up their 
citizenship. That return information was never released to the 
public.
    So we can debate whether or not the authority exists, but 
what is not in debate is it will be unprecedented if that 
authority is used to release taxpayer information.
    Mr. REED. And, Mr. Yin, so do you disagree that there is 
no----
    Mr. YIN. Yes, I--so I disagree with that response----
    Mr. REED. No, not with--I have limited time.
    Are you concerned about the right of privacy that is being 
raised here? Do you think there is no right of privacy to 
anyone?
    Mr. YIN. Yes. I believe there is a balancing between the 
right of privacy of individuals and the right of the public to 
know. And it is up to the Congress to determine how to strike 
that proper balance.
    Mr. REED. How to strike that, right? And that is exactly 
what we are wrestling with.
    So the issue I have, because when I heard you testify to, I 
think it was John Kerry's wife, Geraldine Ferraro's husband who 
was concerned about their privacy, they didn't run for public 
office, right? They didn't venture down this public domain path 
that their husbands or spouses did, wives did.
    So the question I have for you is that if you get a 
Presidential return that shows the President having a 
relationship with Mrs. Jones down the street, Mrs. Jones' 
privacy right needs to be respected, correct? She has a privacy 
right, that her information that because she happened to do 
business with an individual who happens to run for President, 
unbeknownst to her, 10, 20, 30 years, 10 years down the road, 5 
years down the road, her right needs to be respected in this 
conversation, correct?
    Does anybody disagree with that?
    Mr. ROSENTHAL. I agree. Yes, her rights should be 
respected.
    Mr. REED. Yes. So the issue that I am wrestling with here 
is, is there a better way to do this? Because, Mr. Bookbinder, 
you are very familiar with our financial disclosure statements. 
You offered testimony that said, you know, what we can't find 
from this financial disclosure, if it is a $6 million deal or a 
$600 million deal, that is potentially a conflict of interest. 
But isn't that irrelevant?
    The fact on the financial disclosure, it discloses the 
relationship upon which the conflict arises. So if the 
financial disclosure shows that, regardless if it is a dollar 
or a trillion dollars, it is still a conflict that can be 
investigated, and that information is out there. Isn't that 
correct?
    Mr. BOOKBINDER. I think that is correct. But there are 
likely to be relationships that are going to be shown in the 
tax returns that are not shown in the financial disclosures. 
And certainly, when--privacy is incredibly important. But when 
somebody chooses to run for President, they give up lots of 
pieces of their right to privacy.
    Mr. REED. So, Mr. Bookbinder, you just teed up exactly what 
I think may be a wiser course for this Committee to pursue, is 
if there is a concern about the financial disclosure and the 
information that that President or that vice presidential 
candidate, or any candidate who runs, if that individual 
chooses to do that, isn't that the more appropriate vehicle for 
us to be considering legislation to say, look, if you are 
running for President, we want your own form under the 
financial disclosure information, we want you to fill out all 
of these issues? Rather than run the risk of some Mrs. Jones' 
privacy being violated because someone wants to get a tax 
return.
    I don't challenge Mr. Neal's integrity in regards to his 
authority to use 6103. He is a gentleman. I respect him. But I 
am concerned about the next Ways and Means chairman or the next 
political battle that is--chooses to utilize this weapon that 
could potentially be abused by a future chairman or any 
chairman.
    So shouldn't we focus our time on what actually could 
potentially bring Members like me from the other side to say 
let's amend the financial disclosure reforms, target the 
information to that form for that individual, and at the same 
time we respect the privacy of individuals that had nothing to 
do with running for President or vice president?
    I will let you ponder that.
    And with that, I yield back.
    Chairman LEWIS. The chair now recognizes for 5 minutes Mr. 
Kelly.
    Mr. KELLY. Thank you, Chairman. And, again, thanks for 
holding the hearing. All the panelists, thanks for coming in 
today.
    I want to go back to what Mr. Reed said, Mr. Bookbinder, 
would you clarify for me, so when somebody runs for President, 
they give up their expectations of privacy? Is that what----
    Mr. BOOKBINDER. Well, I think anyone who runs for President 
expects to have a lot less privacy than most individuals.
    Mr. KELLY. Okay. So anybody that is a candidate for 
President or serves in the office is an American citizen. Is 
that correct?
    Mr. BOOKBINDER. Yes.
    Mr. KELLY. Okay. So are we saying if you reach a certain 
level, even though you are an American citizen, you are subject 
to greater scrutiny than anybody else? And then my next 
question would be: So at what point do people say are you 
kidding me? Why would I ever run for any of these offices? It 
makes no sense.
    I don't want you to even answer that because I know what 
the answer is. But I want to really be clear. And I want each 
of you to say, and I want an answer. I am not--this may be--and 
I really appreciate your opinions. But you know what, may 
doesn't answer the question, because every time we ask you a 
question, well, this may be what happened, that may be what 
happened.
    Do the President and the vice president, not undergo the 
scrutiny of having their tax returns audited by the IRS?
    Mr. Thorndike, Dr. Thorndike. It is just a yes or no.
    Mr. THORNDIKE. Yes.
    Mr. KELLY. Okay. They do.
    Professor Yin.
    Mr. YIN. The internal revenue manual----
    Mr. KELLY. The question is--it is a yes or no, Doctor. I 
appreciate that, but we are going to run out of time.
    They are audited, are they not? Are not the President and 
the vice president audited for tax returns?
    Mr. YIN. The internal revenue manual does require it. 
Whether they in fact----
    Mr. KELLY. Okay. I know you don't sit on it, so you can't 
be sure. But you know what the answer is.
    Mr. Rosenthal.
    Mr. ROSENTHAL. I have the same response.
    Mr. KELLY. You don't know either. Okay.
    Mr. Bookbinder.
    Mr. BOOKBINDER. I believe so, but I don't think it 
addresses all the issues----
    Mr. KELLY. Okay. Mr. Kies.
    Mr. KIES. Yes.
    Mr. KELLY. Okay. Thank you. I am glad we had experts here 
that could maybe know but couldn't really know.
    I just want to be clear on this. Listen, this would not be 
taking place if we were not about a duly elected President by 
the name of Donald Trump sitting in that office. This is an 
incredible overreach. This is an oversight Committee. Our very 
role is to be the watchdogs to make sure that American citizens 
are protected.
    Now, if I were to go home to my hometown and walk up to 
somebody and say, I don't know that you realize it, but you 
know what, this 6103 is something right now that we really have 
to look at. And they are going to look at me, like, I have 
absolutely no idea what you are talking about. I would say in 
too many cases we have absolutely no idea what we are talking 
about or what we are leading to. This, I said earlier, is a 
Pandora's box. You take the lid off this, and you make anybody 
subject to this type of scrutiny.
    And it is hard for me to believe that since the mid 1970s 
when we had the Watergate fiasco, that the changes to the IRS 
then, especially what happened under President Nixon, that we 
are saying today, that this many years later, that we are just 
not sure that the IRS really knows how to do their job.
    I can remember not too many years ago--Mr. Reed, you sat 
here with me, whenever we talked about Lois Lerner. We 
questioned whether we thought the IRS was doing the right job 
of what was happening and the weaponizing of the IRS. We were 
told, listen, are you telling us you don't believe the IRS 
knows what they are doing. Now, that was not done by our side 
of the aisle, by the way. It was the other side of the aisle 
that said you can't possibly question the integrity of the IRS, 
and I do not question their integrity.
    Look, if there is better ways to do things, I think Mr. 
Reed hit on so many. I mean, this isn't the financial 
disclosures. If there are loopholes, if it is too wide, why not 
narrow it down?
    And one of the Members said this is not lazy legislation 
what we are doing. Well, if it is not lazy legislation, I guess 
we can find some other term for it. It sure as heck is not 
doing our job as legislators. If there is some confusion, then 
we need to straighten it out.
    There are better ways to do it. I understand that. As far 
as the trust and the faith the American people have, each one 
of us got elected for this very purpose, to protect their 
freedoms and liberties and their privacy. It is not to go after 
a political person that we just don't care for.
    Mr. Kies, am I missing something here tonight? I mean, you 
answered things pretty explicitly. And I know you all have this 
great deal of background. But when you can't say you know for 
sure that the IRS knows how to do an audit or if they are doing 
the audit, that is troubling to me. What else would you do? 
What else could we do to make this process better?
    Mr. KIES. Well, I actually think what Mr. Bookbinder has 
talked about is a more productive route of identifying the kind 
of information that you really want here, which is a more 
vigorous financial disclosure for people running for President. 
And you can steer clear of having to delve into releasing 
individual tax returns, which has never ever been done under 
Section 6103. And it is not a route that I think you should 
think about going down unless you are very, very careful. And, 
frankly, I think if there is other ways to get the information, 
it is much better to go in that direction.
    Mr. KELLY. Okay.
    Dr. Yin, you had something to say.
    Mr. YIN. I would just like to correct the record on that, 
because Mr. Kies has made the statement twice. He seems to have 
forgotten that both in 2014 and in 2015, 2014 in the House Ways 
and Means Committee, 2015 in the Senate Finance Committee, 
there was the use of exactly the authority we are talking about 
now combined with a public disclosure in each instance.
    Mr. KELLY. That was during a criminal investigation. Is 
that right?
    Mr. YIN. It was----
    Mr. KELLY. Yeah. Okay. It was. Thank you.
    Listen, I wish we had more time. I would really love this 
could go on for a long time. I know I share the same feelings 
as the chairman. Thank you so much for giving us your time and 
your expertise in weighing in on this.
    Let's make sure as we leave this room today, we are the 
oversight Committee. Our main role is to protect the privacy 
and the rights of every individual American citizen, of which 
our President happens to be.
    Mr. KIES. I would just add one thing. I agree with what 
George just said. What I would say is it has never been legally 
used. George and I both agree that what was done in 2014 and 
2015 was inconsistent with 6103. This Committee and--has never 
legally released an individual tax return under the authority 
of Section 6103.
    Mr. KELLY. It sounds like you and George get together a lot 
and discuss this. So thank you so much for your time.
    Chairman LEWIS. Let me just say to the Ranking Member, my 
friend, Mr. Kelly, it is my strong belief that the American 
people have a right to know. We live in a democratic society. 
We should know people running for office, the office of 
President and vice president, how they earn their money and 
what conflicts they have. So the hearing--this is not the end. 
This is just the beginning.
    I want to thank each member of the panel for your 
participation, for your contribution.
    Please be advised that Members have 2 weeks to submit 
written questions to be answered later in writing. Those 
questions and your answers will be made part of the formal 
hearing record.
    With that, the Subcommittee on Oversight stands adjourned. 
And thank you again.
    [Whereupon, at 5:34 p.m., the Subcommittee was adjourned.]
    [Submissions for the Record follow:]
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